Arla Foods UK, the farmer-owned dairy company, plans to invest approximately £37.5 million (€44m) in its UK sites and logistics in 2017, an increase of 51% from 2016.
Tomas Pietrangeli, Arla Food UK managing director, said: “Last year, I unveiled the most ambitious UK business strategy to date to make Arla a household brand by 2020 and grow its revenue by nearly a third.
“This ambition is part of the company’s global strategy for growth and will position Arla as the champion of British dairy.
“By continually investing and improving our sites, we can ensure we grow capacity, maintain high quality of our products and ultimately return the best possible price to our farmer owners.”
The UK figure is part of the £285 million (€335m) investment Arla is making at its sites around the world.
It will support its global Strategy 2020 by moving more milk from bulk into branded, own label and foodservice sales.
The overall investment is nearly a 50 per cent increase compared to last year (£192m/€227m in 2016) and the highest ever single-year supply chain investment in company history.
The £37.5 million will be spread across all its 13 UK production, packing and distribution sites as well its logistics operation. The projects include:
* Taw Valley creamery, in Devon, will see £5m to further develop capacity and harnessing latest technologies and process to support product quality for its award winning hard cheeses such as Cheddar, Red Leicester and Double Gloucester.
* £5m at Stourton dairy, in Leeds, will see a number of projects that will include a new packing facility that will allow it to increase production of own-label flavoured milk.
* A significant proportion of the £3.5m at Arla’s state of the art fresh milk processing site in Aylesbury will go on new processing equipment for Arla B.O.B. The investment will allow the site to begin production of the successful and award-winning fat-free skimmed milk that tastes as good as semi-skimmed. It was one of the Arla innovations in added value milk launched in 2016, alongside Cravendale 250ml, Arla Organic and Arla Farmers Milk.
* The Westbury operation in Wiltshire, home to Anchor butter, will see £3m spent on supporting facilities to ensure continuous product production during planned essential maintenance.
The global investment figure will be focused on production upgrades at core markets such as Germany, UK, Denmark and Sweden as well as on production sites that supply high-quality dairy products to Arla’s emerging markets outside the EU.
Arla CEO Peder Tuborgh said: “With these investments we continue our relentless pursuit of the goals in our Strategy 2020 to move more milk from bulk into brands and improve the profitability for our farmer-owners. You will see Arla take an even stronger position in the market as the innovative farmer-owned dairy company, providing great-tasting, natural dairy products that help people make good food choices. That is the main focus of these investments.”
Arla’s annual investment forecast has been confirmed and approved by the board of directors, consisting primarily of elected farmer-owners.