April 17, 2017

Arla to invest US$13 million in high-quality infant milk formula production

Arla aims to be among the world's leading dairy companies within the child nutrition category, the company says.

In order to strengthen its infant milk formula production and continually set new quality standards in the category, Arla is investing EUR12 million (US$13 million) in an upgrade of its AKAFA site in Northern Denmark.

The investment will allow Arla to add infant milk formula (IMF) production to its existing powdered milk capacity by upgrading relevant sections of the site to produce high-quality IMF.

The company sells high-quality IMF products under its own brands Arla Baby & Me® and Milex^®, and is also a preferred supplier to a number of third party brands. The biggest markets for Arla within the IMF category is China and Southeast Asia, Latin America and Europe.

"We are seeing double-digit growth in our global IMF sales, and we expect the growth to continue in the coming years due to rising demand in the category worldwide," says group vice president Henrik Andersen, who is head of Arla Foods Ingredients and responsible for Arla's third party manufacturing (TPM) business. "By upgrading AKAFA to include IMF production, Arla will be able to meet the growing demand with high-quality production. Having a strong capacity with the highest quality is essential in a category like IMF, where quality is the key differentiator in the market."

Today, approximately 80% of the production at AKAFA is powdered milk for family nutrition, and 20% is sterilised cream. The site's products are sold in markets within Latin America, Africa, Middle East and Asia.

The new IMF production at AKAFA is expected to start in August 2018, and will create two to four new jobs at AKAFA.

The investment was approved by Arla Foods' board of directors.

- Arla