Arla Foods moves some production to the Middle East
Arla foods has announced that parts of the production at three of its sites will be moved to the newly acquired site in the Middle East as part of the company’s aim to bring new commercial opportunities to customers as well as its ongoing efforts to make its supply chain more efficient.
Arla foods has announced that parts of the production at three of its sites will be moved to the newly acquired site in the Middle East as part of the 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 announced an agreement with Mondeléz International 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 28, and Arla has now taken over the acquired operations.
The acquisition also gives the company full ownership of a 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.
Arla will 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 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:
- Approximately 26,000 tons (annually) of processed cheese from Bislev, potentially impacting 40 jobs
- Approximately 18,000 tons (annually) of sterilized cream from AKAFA, potentially impacting 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 four weeks as transport time to customers in MENA is reduced significantly.