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Major Investment to Boost Arla’s Profitability

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Major Investment to Boost Arla’s Profitability

Major Investment to Boost Arla’s Profitability
February 03
12:47 2014

Arla Foods is looking to expand its production globally and make it more eco-friendly by investing DKr2.2 billion (Eur295 million) in ten of its dairy sites in 2014. The focus will be on production of profitable export products for the company’s strategic growth markets outside the EU.

With an ambition to double its exports of European dairy products to growth markets outside the EU by 2017, Arla has announced a new investment plan for the coming year. Recently approved by the board of directors, the plan contains investments of up to DKr2.2 billion.

Povl Krogsgaard.

The money will go into new and ongoing dairy expansions and into projects that will help make Arla’s production even more climate-friendly.

“This year we are increasing our investments to dairy sites that contribute to our export out of Europe. Our sales on the growth markets outside the EU are growing at a fast pace, and we must prepare ourselves to meet the rapidly growing demand in years to come. In Arla we are determined to create good growth, and we are therefore also investing more than DKr125 million in projects that will make our production chain even more climate-friendly,” says Vice-CEO in Arla Foods, Povl Krogsgaard.

In total, DKr750 million will be invested in production for Arla’s strategic growth markets outside the EU – Russia, China, the Middle East & Africa – which is a third of this year’s production investments (compared to DKr466 million in 2013).

Arla’s production investments in 2014 make up nearly three per cent of the expected turnover of approximately DKr79 billion, which is also the ambition in Arla’s Strategy 2017. The goal is to increase profitability in Arla’s business and thereby create a higher earning for Arla’s cooperative members long-term.

The largest single investment in 2014 is approximately DKr530 million for the ongoing construction of a new lactose production site near Nr. Vium in Denmark. The new site will produce value-added lactose ingredients based on whey from Arla’s nearby cheese production. These ingredients will be used for child nutrition products and other categories and sold to the food industry globally by Arla’s subsidiary Arla Foods Ingredients.

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