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Arla plans for future growth of ingredients business, announces new partnership
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Tuesday, 10 September, 2024, 15 : 00 PM [IST]
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Denmark
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Arla Foods Ingredients (AFI), is on a great growth journey and is projected to outgrow available capacity at the two Danish sites, Danmark Protein and Arinco. To unlock new opportunities for the ingredients business, the company has decided to change the strategic role in Videbæk, Denmark, making investments that will transform it into a dedicated ingredients production site.
AFI, a subsidiary of the company, is serving the global food industry with premium ingredients used in early life nutrition, clinical nutrition, sports nutrition as well as other food and beverage products.
Luis Cubel, group vice president and managing director, Arla Foods Ingredients, said, “We see a very bright future for ingredients and a world of opportunities. This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable Arla Foods Ingredients to further strengthen our position as a leading global player in the ingredients market.”
Currently, besides ingredients, it produces milk powder for AFI’s B2B sales of Early Life Nutrition (ELN) and Arla’s branded Early Life Nutrition business. While it has been decided that the AFI B2B business of ELN will discontinue in about 19 months, Arla will continue to expand the branded ELN business.
The company has entered a partnership with French cooperative and ELN producer, Sodiaal. They will work closely together to accelerate the China ELN business of the two companies, and Sodiaal will produce all of Arla’s future needs for ELN products in China as well as other markets.
Its branded ELN business will benefit from Sodiaal's strong production capabilities to continue the current positive momentum. Both companies are farmer owned, both have integrated supply chains, and the companies’ production technologies are very similar. The new strategic direction will create more capacity for its growing ingredients production. Regrettably, it will also have an impact on approximately 170 job positions.
“It goes without saying that this is a difficult situation and a tough day for our employees. The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected. The employees are highly skilled, and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable,” concluded Cubel.
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