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Arla Foods Ingredients (AFI) is making changes to allow for a ‘great growth journey’ in its ingredients business, which is projected to outgrow capacity at its two Danish sites, Danmark Protein and ARINCO.

To unlock new opportunities for its ingredients segment, Arla has announced plans to change the strategic role of its ARINCO site in Videbæk, Denmark, making investments that will transform it into a dedicated ingredients production facility.

Besides ingredients, ARINCO currently produces milk powder for AFI’s B2B sales of Early Life Nutrition (ELN) and Arla’s branded ELN business. AFI says that the B2B Early Life Nutrition business will discontinue in around 19 months, while it plans to continue to expand its branded ELN business.

Luis Cubel, group VP and managing director of Arla Foods Ingredients, said: “We see a very bright future for ingredients and a world of opportunities. This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable Arla Foods Ingredients to further strengthen our position as a leading global player in the ingredients market.”

New strategic partnership

Arla has entered into a strategic partnership with French cooperative and ELN producer, Sodiaal. Under the initiative, Arla and Sodiaal will work together to accelerate the two companies’ China ELN businesses, and Sodiaal will produce all of Arla’s future needs for ELN products in China and other markets.

Arla expects its branded ELN business to benefit from Sodiaal's production capabilities, which will continue its current positive momentum. Both companies are farmer-owned and have integrated supply chains, and their production technologies are very similar.

The new strategic direction will create more capacity at ARINCO for Arla’s growing ingredients production. The change will impact around 170 job positions at the ARINCO site and Arla Foods Ingredients’ headquarters in Aarhus, Denmark.

Cubel continued: “It goes without saying that this is a difficult situation and a tough day for our employees. The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected. The employees are highly skilled, and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable.”

During the 19-month transition period, Arla says it will work closely with customers to meet their demands before discontinuing the ELN production at ARINCO by the end of Q1 2026.

This is the latest in a number of investments in Denmark. Last month, Arla Foods invested around DKK 200 million (approx. $29 million) in its Esbjerg Dairy Center in Denmark, to support the growth of its milk-based beverage segment, and in June, the dairy giant introduced its customer partnership sustainability initiative to the country. In March, Arla Foods Ingredients unveiled plans to construct an electric heat pump at its primary processing plant in Denmark, the result of a €32 million investment.

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