Arla ‘cements’ ambitions in Russia through JV share acquisition

By Mark ASTLEY contact

- Last updated on GMT

Related tags: Cheese

Arla ‘cements’ ambitions in Russia through JV share acquisition
Dairy giant Arla Foods has acquired the remaining stake of the joint venture that controls its activities in Russia – a move the company claims “cements” its ambitions in the country.

In 2007, Arla purchased an initial 75% stake in St Petersburg-based distribution company, Artis, which was later re-named Arla Foods Artis. Last week, Arla acquired the final 25% of the company – making it a wholly-owned subsidiary of Arla.

Through the distribution firm, Arla sells its Lurpak, Castello, Arla Apetina, and Arla Natura brands to customers in 95 towns across Russia. The company also has plans to launch a locally-manufactured yellow cheese product under the Arla Natura brand.

Arla’s senior vice president of Consumer International with responsibility for Russia and North America, Hans Christensen, believes that the deal to acquire the remaining stake of Arla Foods Artis will solidify Arla’s ambitions in the country.

“The acquisition of the last 25% cements our ambitions in Russia,” ​said Christensen.

“Under the agreement from 2007, we have always had the option to acquire the remaining holding, and in view of our success in the Russian market, and our ambitions in our Strategy 2017, both parties considered this to be the right time.”

In January 2013, Arla unveiled its latest five-year growth plan – Strategy 2017.

Under the strategy, Arla intends to build on the export potential that lies in markets such as Russia, China, the Middle East and Africa. Overall revenue generated in these markets is expected to increase from approximately 3.5bn DKK ($622m) to 10bn DKK ($1.77bn) by 2017.

In Russia, Arla plans to build “strong market positions for high-quality products within the butter and cheese categories, and to investigate opportunities to produce locally via partnerships or acquisitions.”

Arla’s goal in Russia is a “threefold increase”​ in revenue by 2017.

DairyReporter.com attempted to contact Arla Foods in regards to the deal, but no one was available prior to publication.

Related topics: Business, Dairy-based ingredients

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