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Arla Foods to Expand Production in 2013

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Arla Foods to Expand Production in 2013

Arla Foods to Expand Production in 2013
January 24
14:35 2013

During 2013, Arla Foods will invest in a number of dairy expansions and new facilities in order to increase global production of its most profitable products. Arla also intends to increase  efficiencies within production while also reducing its environment impact.

The group’s expansion plan for 2013 includes investments totalling over DKr2 billion (Eur268 million) for capacity expansion, rationalisation measures, environmental improvements, maintenance, quality and innovation.

The 2013 investment level is approximately 3% of expected revenue, and is also in line with Arla’s group strategy for 2017 (compared with approximately 3.4% in 2012). The objective is to contribute to the increased profitability of Arla’s activities, and therefore improve long-term earnings for Arla’s owners.

“This year, the largest proportion of our investments will be devoted to expanding the production capabilities of a number of our dairies which manufacture products for export to the growth markets outside the EU, for example. Our ability to improve profitability for Arla’s owners is dependent upon us increasing sales of quality products all over the world, which is why, during 2013, we are investing in new production and expanding existing facilities,” says Povl Krogsgaard, who has responsibility for Arla’s investment plan.

Almost 40 per cent of Arla’s total investment plan will be devoted to expanding the production facilities. The second-largest focus area for Arla’s investments in 2013 is production rationalisation initiatives.

“Arla’s Group strategy includes the objective to reduce our production costs by DKr2.5 billion by the end of 2015, via, for example, investing in projects to streamline production at our dairies. This year, we are investing approximately DKr370 million in such projects,” says Povl Krogsgaard.

The largest single investment for Arla in 2013 will be the construction of a completely new production facility at Nr Vium inDenmark, which will manufacture highly-processed whey-based lactose products. These ingredients will be used in products in areas including child nutrition, and will also be sold globally by Arla’s subsidiary, Arla Foods Ingredients.

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