Arla Foods UK, the farmer-owned dairy company, plans to invest approximately £37.5 million1 (€44m) in its UK sites and logistics in 2017, an increase of 51% from 2016.
Tomas Pietrangeli, Arla Food UK managing director said: “Last year, I unveiled the most ambitious UK business strategy to date to make Arla a household brand by 2020 and grow its revenue by nearly a third2. This ambition is part of the company’s global strategy for growth and will position Arla as the champion of British dairy. By continually investing and improving our sites, we can ensure we grow capacity, maintain high quality of our products and ultimately return the best possible price to our farmer owners”.
The UK figure is part of the £285 million (€335m) investment Arla expects to make at its sites around the world. It will support its global Strategy 2020 by moving more milk from bulk into branded, own label and foodservice sales. The overall investment forecast is nearly a 50 per cent increase compared to last year (£192m/€227m in 2016) and one of the highest ever single-year supply chain investment in the company's history.
The £37.5 million will be spread across all its thirteen UK production, packing and distribution sites as well its logistics operation. The projects include:
- Taw Valley creamery, in Devon, will see £5m to further develop capacity and harnessing latest technologies and process to support product quality for its award winning hard cheeses such as Cheddar, Red Leicester and Double Gloucester.
- £5m at Stourton dairy, in Leeds, will see a number of projects that will include a new packing facility that will allow it to increase production of own-label flavoured milk.
- A significant proportion of the £3.5m at Arla’s state of the art fresh milk processing site in Aylesbury will go on new processing equipment for Arla B.O.B. The investment will allow the site to begin production of the successful and award-winning fat-free skimmed milk that tastes as good as semi-skimmed. It was one of the Arla innovations in added value milk launched in 2016, alongside Cravendale 250ml, Arla Organic and Arla Farmers Milk.
- The Westbury operation in Wiltshire, home to Anchor butter, will see £3m spent on supporting facilities to ensure continuous product production during planned essential maintenance.
Global Investment Plan:
The global investment figure will be focused on production upgrades at core markets such as Germany, UK, Denmark and Sweden as well as on production sites that supply high-quality dairy products to Arla’s emerging markets outside the EU.
“With these investments we continue our relentless pursuit of the goals in our Strategy 2020 to move more milk from bulk into brands and improve the profitability for our farmer-owners. You will see Arla take an even stronger position in the market as the innovative farmer-owned dairy company, providing great-tasting, natural dairy products that help people make good food choices. That is the main focus of these investments,” says Arla CEO Peder Tuborgh.
Arla’s annual investment forecast has been confirmed and approved by the Board of Directors, consisting primarily of elected farmer-owners.
1 GBP figures converted from Euro figures based on spot exchange rate as of January 30, 2017
2Arla Foods UK revenue in 2015 stood at £2.0bn (excludes commodity trading) and aims to grow to £2.6bn by 2020.
Arla Foods is a global dairy company and co-operative owned by 12,700 dairy farmers with circa 2,700 of whom are British.
Dating back to 1881, Arla’s purpose is to secure the highest value for its farmers’ milk, while creating opportunities for their growth. With production facilities in 11 countries and sales offices in a further 30, Arla is the world’s fifth largest dairy company and largest supplier of organic dairy products. Arla has a total of more than 18,000 colleagues and its products are sold under the well-known brands Arla®, Lurpak® and Castello® in more than 100 countries.
Arla Foods UK is the largest dairy company in the country and is home to leading dairy brands Anchor®, Cravendale, and Lactofree® with a turnover of €2.9 billion. As well as being a leading supplier of fresh milk, number one in butter, spreads and cream, Arla is the UK’s largest cheese manufacturer. It has also built the world’s largest fresh milk facility located at Aylesbury and has plans for it to be the first zero carbon site of its kind. The UK business has a team of approximately 3,500 colleagues located at its dairies, distribution centres and head office.