Arla Foods has announced plans to invest €619 million in major projects this year, as part of its 2020 growth strategy.
The announcement was made with the release of key 2019 results prior to the full-year report, in which Arla’s revenue increased to €10.5 billion.
This was driven by Arla’s global brand portfolio which achieved a year-on-years sale volume increase of 5.1%.
According to Arla, it particularly exceeded expectations within its Calcium programme, a transformation programme initiated in April 2018 which aims to save more than €400 million by the end of 2020 through improved efficiency in all areas of the company.
The dairy cooperative saved €110 million in 2019, and with its accumulated savings since its launch, Arla is more than hallway towards its 2021 end goal.
The €619 million investment will be used for a variety of major projects to expand capacity in growth sectors, with a focus on branded growth and its sustainability agenda.
Projects include continuing the completion of a powder tower in Pronsfeld, Germany to expand its milk powder offerings for international markets.
It will also contribute to the expansion of mozzarella capacity in Branderup, Denmark. At the end of last year, it announced plans to invest €80 million to more than double the production of mozzarella at the site.
Upgrades will be made to the newly acquired Bahrain production site with the capital. In October 2019, the Danish dairy cooperative said it would invest approximately €50 million in the plant over the next two to three years.
Finally, significant investments will be made into capacity increases for its subsidiary Arla Foods Ingredients.
The end of 2020 will mark the completion of Arla’s Good Growth 2020 strategic period, and the company expects to reach all its long-term financial targets.
Arla CEO Peder Tuborgh said: “As we come into the home stretch of our Good Growth 2020 strategy, it’s clear that it has been a very successful guide for us to grow our global and branded positions.
“Looking forward, we will continue to capitalise on these strengths, increase our innovation capabilities and most importantly, strengthen our commitment to sustainability to secure even more value for our farmer owners going forward.”
© FoodBev Media Ltd 2019