At the same time, many of the investments will generate CO2 and energy savings. Arla’s Board of Directors has approved the group’s investment plan for 2012, amounting to DKK1.8bn (DKK1.7bn in 2011).
The investments – being made at a time of economic crisis and slow consumer spending in the US and Europe – will primarily aim at improving dairy structure and increasing capacity.
Arla’s CEO, Peder Tuborgh, said: “In times of crisis, it’s vital that we maintain our competitiveness. We believe that these investments in increased efficiency and rationalisation will support our long-term competitiveness and growth ambitions.”
Of the total investment forecast of DKK1.8bn, approximately half has been allocated to capacity and rationalisation projects, explained vice CEO, Povl Krogsgaard, who oversees Arla’s overall investment plan.
“We have prioritised investments aimed at simplifying our dairy structure and increasing capacity as well as investments with a quick pay-back. Our aim is efficiency and lower production costs.”
One of the biggest single investment areas in 2012 will be at Arla Foods Ingredients (AFI) where DKK 246 million will be invested in various projects, including a new drying tower at Denmark Protein in Videbæk. The tower, which is currently under construction, is an essential component in Arla’s joint-venture with the German dairy company, DMK.
Krogsgaard said: “We’ve never invested so much in AFI before, but we’re doing so now because the subsidiary is performing extremely well and its results are helping to fund strategic initiatives in other areas. AFI is a world leader in its field and our investments will help us build on this.”
Source: Arla Foods
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