FDBusiness.com

International dairy group Arla Foods has decided to invest €12 million in an upgrade of its AKAFA production site in Northern Denmark, which will allow it to add infant milk formula (IMF) production to its existing powdered milk capacity. The investment will not require an expansion of the site, but consists of an upgrade of relevant sections of the site to produce high-quality IMF.

Arla Foods sells high-quality IMF products under its own brands like Arla Baby & Me® and Milex® and is also a preferred supplier to a number of third party brands. The biggest markets for Arla Foods 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. 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,” says group vice president Henrik Andersen, who is head of Arla Foods Ingredients and responsible for Arla’s third party manufacturing (TPM) business.

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 is in line with Arla Foods’ aims to be among the world’s leading dairy companies within the child nutrition category.