Arla Foods to pour £72m in UK dairy sites in 2018

Posted on 1 Feb 2018 by Jonny Williamson

Farmer-owned dairy cooperative Arla Foods has announced it will invest £72m in the UK in 2018, with 10 sites across the country receiving upgrades.

Arla Foods is to invest £72m in the UK this year, as ten sites across the country will receive investment for upgrades – image courtesy of Arla Foods.

Overall, Arla Foods has announced plans to invest almost half a billion pounds (€527m) worldwide this year, as the company pledges to deliver on its 2020 growth ambitions. More than £70m of that investment is forecast be spent in the UK this year.

Investments are anticipated in new, expanded and improved production capacity, as well as innovative technology.

At a meeting in London this week, chair of Arla Foods, Åke Hantoft, underlined that all investments by Arla Foods are made to secure long-term growth and profit opportunities for the company’s 11,200 farmer owners across Europe.

Hantoft said: “The business growth these investments will create for our company will generate growth opportunities for our farmer owners. We see these investments as essential to the future of our business.”

Major UK investment

The company has announced that £72m of the investment will be spent in the UK in 2018, a clear sign of Arla’s commitment to dairy production across the UK.

In total, 10 of Arla’s 12 sites across the UK will receive investment for upgrades. As Arla’s biggest single market, the company’s economic footprint in the UK is valued at more than £6bn in GVA, equivalent to 0.52% of the entire business economy and 0.33% of UK GDP.

Arla’s carbon net zero site in Aylesbury will see the biggest proportion of UK spend with an reported investment of £33.6m as it becomes the UK home to the production of Arla’s Lactose free dairy products using milk from UK farmers in the south east and the midlands.

Arla considers the UK a key market for Lactose free products – image courtesy of Depositphotos.

Having led the way in Lactose free dairy production across Europe, Arla considers the UK a key market for Lactose free products and will use its experience in Scandinavian markets to meet the increasing UK demand.

Arla is to use 100% recyclable plastic

The investment in Aylesbury will also provide new facilities for the production of new product packaging using flexible pouches. The commitment of financial investment for the diversification of its packaging materials signals a clear move from Arla to explore alternatives to plastic.

As a company which has already committed to using 100% recyclable plastic by 2020 and 50% recycled plastic in its plastic milk bottles, the investment into emerging packaging is further evidence of Arla’s commitment to sustainable business.

According to the Arla Foods, £5.5m will be used to upgrade processing facilities at Arla’s Lockerbie plant in Scotland. The figure takes investment in Scotland in recent years to more than £44m which included the installation of an anaerobic digester to offset Lockerbie’s carbon footprint.

Continued investment is further evidence of the strategic importance of Arla’s site in Scotland and its position as one of the most advanced dairy sites in the region.

The remaindering £32.5m will be split across Arla’s sites in Melton Mowbray, Llandyrnog, Malpas, Oakthorpe, Stourton, Settle, Oswestry and Trevarrian.

The company has committed to using 100% recyclable plastic by 2020 – image courtesy of Arla Foods.

The figure also includes non-site-specific investments which will enable Arla continue to drive growth for the farmers which own it and capitalise on increasing demand for dairy.

Tomas Pietrangeli, managing director of Arla Foods UK, comments: “Arla is the biggest dairy company in the UK, owned by 11,200 farmers across Europe.

“This investment is almost double the investment of last year and, with the exception of building the Aylesbury dairy, it is the biggest annual investment for Arla in the UK.

“While milk prices remain volatile and Brexit brings both uncertainty and opportunity, Arla farmers in the UK and across Europe are committed to continually investing in our UK business to maintain pace with the demand for nature’s original superfood, and the consumer choice it creates.”