Arla invests in lower costs

Posted: 23 January 2012 | Arla Foods | No comments yet

In 2012 Arla will invest in a stronger dairy structure, the processing of whey ingredients and more focus on growth markets…

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In 2012 Arla will invest in a stronger dairy structure, the processing of whey ingredients and more focus on growth markets, with the aim of increasing Arla’s international competitiveness. At the same time, many of the investments will generate CO2 and energy savings.

Arla’s Board of Directors has approved the Group’s investment plan for 2012, amounting to DKK 1.8 billion (DKK 1.7 billion in 2011). The investments will primarily aim at improving dairy structure and increasing capacity.

The investments are being made at a time of economic crisis and slow consumer spending in the US and Europe.

“In times of crisis, it’s vital that we maintain our competitiveness. We believe that these investments in increased efficiency and rationalisation will support our long-term competitiveness and growth ambitions,” says CEO Peder Tuborgh.

Of the total investment forecast of DKK 1.8 billion, approximately half has been allocated to capacity and rationalisation projects, explains Vice CEO Povl Krogsgaard, who oversees Arla’s overall investment plan.

“We have prioritised investments aimed at simplifying our dairy structure and increasing capacity as well as investments with a quick pay-back. Our aim is efficiency and lower production costs.”

More money for Ingredients

One of the biggest single investment areas in 2012 will be at Arla Foods Ingredients (AFI) where DKK 246 million will be invested in various projects, including a new drying tower at Denmark Protein in Videbæk. The tower, which is currently under construction, is an essential component in Arla’s joint-venture with the German dairy company, DMK.

“We’ve never invested so much in AFI before, but we’re doing so now because the subsidiary is performing extremely well and its results are helping to fund strategic initiatives in other areas. AFI is a world leader in its field and our investments will help us build on this,” says Povl Krogsgaard.

In 2012, the Arla group expects to post a turnover of approx. DKK 59 billion.

Facts – Prioritisation of investments 2012:

  • Improved dairy structure which will significantly enhance efficiency
  • More growth and added value in Arla’s whey product area
  • More resources for growth markets
  • Environmental investments with a view to saving CO2 and energy

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