FDBusiness.com

DMK (which is being created by the merger of Nordmilch and Humana) and Arla Foods will establish a 50/50 joint venture to process whey for the global food manufacturing industry. The name of the new joint venture will be ArNoCo, and the two partners will invest a total of Eur44m in whey processing capacity. Eur35m will be used to build a whey processing plant at DMK’s cheese plant at Nordhackstedt in Northern Germany, and Eur9m will be spent at Arla Foods’ Danmark Protein plant in Denmark.

The joint venture will buy whey from DMK, estimated at more than 700,000 tonnes annually, and convert it into whey protein concentrate and lactose at the new plant. The Whey Protein Concentrate will then be dried at Arla Foods’ plant Danmark Protein. DMK will supply all related services on behalf of ArNoCo. Arla Foods Ingredients will market, sell and distribute the products to the global food manufacturing industry.

Peder Tuborgh, chief executive of Arla Foods.

The building of the new plant is expected to start in October 2011. The plant is scheduled to be in operation by the end of 2012 creating approx. 24 jobs.

Dr Josef Schwaiger, future chief executive of DMK, explains the rationale behind the move: “Expanding the ingredients business is one of DMK’s strategic growth areas. Its alliance with Arla in ArNoCo is therefore an important step towards higher value added and will strengthen the Nordhackstedt location’s position for the long term.”

Peder Tuborgh, chief executive of Arla Foods remarks: “We have identified the whey business as an important part of Arla Foods’ 2015 strategy and we are set to double the turnover of our whey business. This is an important step forward in achieving that goal.”

Arla Foods is a leader in the global market for whey protein and has other whey partnerships in Argentina, Germany, France, Norway and Sweden. The new joint venture is subject to approval by the relevant competition authorities.