Dairy giant Arla Foods has pledged to invest £243 million to expand its global production, which will allow it to focus on the production of profitable export products.
The company said it planned to focus on exports to non-EU markets for growth, aiming to double sales through this channel by 2017.
Arla Foods announced the move today (February 3rd) and advised the money would be committed to “new and ongoing dairy expansions”.
Povl Krogsgaard, vice chief executive officer of the dairy company, said: “This year we are increasing our investments to dairies 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.”
He said the company is determined to create positive growth, which is why it is investing nearly £14 million into projects that will make the production chain even more environmentally friendly.
Arla Foods aims to cut greenhouse gas emissions by 25 per cent before 2020. The company will be securing new heating pumps and water-saving equipment to help achieve this target.
The firm’s investments in environmental improvements are expected to reduce the group’s overall energy consumption in production by 2.3 per cent this year - a reduction equivalent to the annual energy consumption of around 13,800 standard households, according to Arla.
In addition, the company has announced that almost £83 million would be invested in production for Arla’s strategic growth markets outside the European Union, such as Russia and China.
The company’s goal here is to increase profitability and create higher earnings for the business’ cooperative members in the long term.
According to Arla, its largest single investment this year will be almost £58 million for the ongoing construction of a new lactose production site near Norre Vium in Denmark. The site will produce value-added lactose ingredients based on whey from a nearby cheese production facility.
Mr Krogsgaard said: “The new lactose site is a very important investment for us. One of our most profitable business areas is whey-based ingredients for the global food industry, and that business must be doubled by 2017.
“The new lactose site will produce high-quality ingredients for child nutrition products that are in high demand especially in Asia.”