Arla: Production capacity shuffle

Date 06.04.2019 | Category: News
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Parts of the production at three Arla Foods sites will be moved to a newly acquired site in the Middle East as part of the farmer-owned company’s aim to bring new commercial opportunities to customers as well as its ongoing efforts to make its supply chain more efficient.

 

The move is not expected to take place until late 2020 and mid-2021, but Arla Foods is announcing the change in advance time to ensure a smooth and transparent transition as well as timely solutions for affected staff.

 

In December 2018, Arla Foods (“Arla”) announced an agreement with American multinational confectionery, food, and beverage company Mondeléz International (“Mondeléz”) to acquire its processed cheese business in the Middle East region, which is currently licensed under the Kraft brand. This deal was formally completed on May 28th, and Arla has now taken over the acquired operations.

 

The acquisition also gives Arla full ownership of a state-of-the-art cheese production site in Bahrain, which provides Arla with the opportunity to further expand the company’s branded cheese production in the region Middle East and North Africa (“MENA”) and to further improve overall efficiency in its supply chain.

 

Moving selected production lines to new site 

Following the acquisition Arla is now announcing its decision to move certain processed cheese and sterilized cream production lines from its Bislev and AKAFA sites in Denmark and from its Riyadh site in Saudi Arabia – all to the newly acquired site in Manama in Bahrain.

 

There are still a number of factors that can change the final numbers, however it is Arla’s current estimate that the following volumes will be moved:

 

Approx. 26,000 tons (annually) of processed cheese from Bislev, potentially impacting approx. 40 jobs

Approx. 18,000 tons (annually) of sterilized cream from AKAFA, potentially impacting approx. 35 jobs

The volumes of processed cheese to be moved from Riyadh is still to be confirmed.

 

Located in Manama, Bahrain the newly acquired site currently has a capacity exceeding 66,000 tons. Built in 2008, it includes an on-site innovation pilot plant and has won multiple awards for manufacturing excellence within core cheese categories. By moving the production of processed cheese and sterilized cream to this site, Arla also expects to improve the shelf-life of these products by 4 weeks as transport time to customers in MENA is reduced significantly.



Source: Arla Foods
Author: Sossna
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