Arla plans marketing and capacity increases

By staff reporter

- Last updated on GMT

Related tags Arla Denmark

Arla is upping its marketing spend by 30 per cent in 2010, and plans to invest almost a billion DKK in more capacity increases and structural changes.

The Danish dairy cooperative made cuts across its business in 2009, as a result of the global economic slump; there was also strong price competition in the dairy sector. But 2010 looks to be a year when the Arla brand will have more cash behind it, and the means are put in place for future growth.

The board has this week approved the new budget, which is said to be 30 per cent higher than it was in 2009. Costs will continue to be closely controlled, however, as the emphasis on efficiency continues.

“During 2010, we will again show our customers, and consumers, across the world what Arla stands for and what we can and want to achieve,”​ says Arla Foods’ CEO Peder Tuborgh, who also said that the objective is to achieve the highest possible price for its farmers.

Tugborgh mentioned two pressing aims: On the one hand, Arla is aiming to secure the highest price possible for its farmers; on the other, it wants to increase sales – and therefore production – of value added ingredients.

Almost half Arla’s investment budget, totaling DKK 1.843bn (c €0.25bn at today’s exchange rate) will be spent on increasing capacity and making structural adjustments. This investment represents around 4 per cent of the turnover expected this year.

”Our focus is to continue to add more value to our milk and to continue to work towards achieving our growth target for 2015 of DKK 75 billion [c 10bn], and we’ll not achieve this without significantly expanding our capacity,”​ said Tuborgh.

2009 investments

Despite the cautious flavour to 2009, Arla did announced two new investments in its infrastructure towards the tail end of the year.

In October Arla announced the opening of a new application centre for advanced protein ingredients next to its new head office in Aarhus. Replacing the old development facilities in Brabrand and near Vium, the new centre – which cost DKK20m – is to employ 30 technologists working within functional proteins from milk and whey extracted during Arla’s cheese production.

The following month it unveiled plans for a gigantic new milk processing facility, with a capacity of 1bn kg of milk, is to be built on the outskirts of London in the UK. The facility is expected to be completed in 2012, and will create 500 new production, distribution and administration jobs.

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