DENMARK – Arla Foods, a Denmark-based dairy cooperative, has announced plans for a strategic operational evaluation of its speciality cheese facility in Melton Mowbray, Leicestershire, UK.
The Melton Mowbray creamery, also known as Tuxford & Tebbutt, is being put up for sale as the speciality cheese market in the UK, including Stilton, has experienced a decline in recent years.
The 60-employee facility will continue its operations during the evaluation period, and Arla assures that there will be no disruptions to production, customers, or employees.
The cooperative aims to explore potential buyers for the creamery and expects to deliver an update on the review by April 2024.
Concurrently, Arla Foods is in discussions to acquire the Semper facility in Götene, Sweden, from Hero Group.
The Semper facility, producing gruel, infant formula, and gluten-free mixes, is set to be closed by Hero Group due to changing market conditions, including a decline in baby milk consumption, reduced demand from China, and a lower birth rate.
Arla Foods already has a cheese and spreadable butter factory in Götene, adjacent to the Semper site, and the two companies share facilities.
The cooperative is interested in acquiring the factory buildings, equipment, and land, which would enhance its production capacity for milk powder, particularly for industrial markets.
The acquisition aligns with Arla’s strategy to utilize surplus milk and increase production capacity for powdered milk.
Arla Foods currently operates two powdered milk facilities in Sweden and exports the product to markets including the Middle East and China. The acquisition of the Semper facility would further strengthen Arla’s position in the dairy industry and contribute to its strategic growth objectives.
Jim Frandsen, General Manager of Hero’s northern European business, stated that discussions with unions have been initiated due to the need for operational efficiency and competitiveness amid lower production levels at the Götene plant.
The acquisition, if successful, would expand Arla’s capabilities in the powdered milk production sector.
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