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Arla Foods to build whey protein factory in Argentina

Press Release   •   May 17, 2001 16:45 CEST

Model of the new factory in Argentina.Arla Foods has signed a partnership contract with Argentina’s SanCor dairy company for a joint venture for processing whey from SanCor. Operating under the name Arla Foods Ingredients the new company will build a whey protein plant in the town of Porteña 600 km north east of Buenos Aires.

The total capital of the new company will be between DKK 500 million and 600 million.

Arla Foods and SanCor, Argentina’s largest dairy company, will each provide 25 per cent of the company’s capital. The remaining 50 per cent will be funded by a consortium comprising Rabobank, the German Investment Bank, DEG, the Danish Export Credit Fund and the Investment Fund for Emerging Markets. The developer Skanska will be responsible for the buildings while the APV group will supply and install machinery and equipment. The project is scheduled for completion during the summer of 2002.

“Arla Foods has, for some time, used all the whey available in Denmark,” said Group Director Andreas Lundby. “Today, however, this is not sufficient for us to service our large international customers within the food sector. This, combined with the significant potential for selling whey proteins in South America and SanCor’s extensive cheese production, makes it a natural choice to build a joint whey factory in Argentina.”

By agreement with Sancor, Arla Foods will operate the new factory, provide the necessary know-how and market its products to customers. SanCor will supply the whey.

Managing Director of the company will be Klaus Kristiansen, Arla Foods Argentina, with Finn Simonsen, formerly of Danmark Protein in Nr.Vium, as Factory Director.

The new factory will have a turnover of approximately DKK 250 million and a workforce of

SanCor, which receives 2 billion litres milk per annum, Monday announced plans for a merger with Argentina’s third largest dairy group, Milkaut. The merger, which is expected to become a reality before the end of 2001, will result in Latin-America’s largest dairy group. The merged group will trade as SanCor Milkaut Cooperative Limitada.

SanCor currently operates 14 cheese dairies which will all supply whey to the new factory.