FDBusiness.com

With Arla Foods maintaining its profit projections for 2010 of DKr1.2b, the Scandinavian dairy co-operative has decided to increase the milk price to members for the fifth time this year.

“During 2010, the global market improved viewed against the crisis year of 2009. This means that prices for dairy products have adjusted accordingly and our earnings have improved. Over the year we have, therefore, gradually been able to raise the price paid to our owners,” explains Peder Tuborgh, chief executive of Arla Foods.

Peder Tuborgh, chief executive of Arla Foods.

He continues: “Arla’s profit target is DKK 1.2 billion, a target that we’ve had within our sights for the past year. Now that we’ve almost reached the end of 2010, we believe that we can achieve our target and, at the same time, increase the milk price.”

While a number of markets continue to suffer the consequences of the economic crisis, sales have been good in certain other Arla markets. Not only does this mean that capacity at the dairies is being well utilised, it also has a positive impact on the bottom line. Some non-recurring items such as foreign exchange factors have also played a part.

Although the current situation is positive, Peder Tuborgh believes that 2011 is expected to be more uncertain. “As a result, we expect the market to see more fluctuations where we as a dairy company will have to react faster to both positive and negative changes in the market,” he says.