DENMARK – Arla Foods Ingredients (AFI) is set to embark on a major transformation to support the growth of its ingredients business, which is expected to surpass the capacity of its two primary Danish sites, Danmark Protein and ARINCO.
As part of this shift, Arla will reconfigure the role of its ARINCO site in Videbæk, Denmark, investing in its conversion into a dedicated ingredients production facility.
Currently, ARINCO produces both ingredients and milk powder for AFI’s B2B Early Life Nutrition (ELN) sales and Arla’s branded ELN business.
However, AFI plans to phase out its B2B ELN operations within the next 19 months while continuing to expand its branded ELN segment. This change will allow ARINCO to focus exclusively on ingredients, aligning with Arla’s ambitious growth strategy in this area.
“We see a very bright future for ingredients and a world of opportunities,” Luis Cubel, Group VP and Managing Director of Arla Foods Ingredients noted.
“This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable Arla Foods Ingredients to further strengthen our position as a leading global player in the ingredients market,”
In conjunction with this transformation, Arla has entered into a strategic partnership with French cooperative and ELN producer, Sodiaal.
This collaboration will focus on accelerating both companies’ ELN businesses in China, with Sodiaal taking on the production of Arla’s ELN products for China and other markets.
Arla expects this partnership to bolster its branded ELN business, benefiting from Sodiaal’s production capabilities, which will support continued positive momentum.
The shift in ARINCO’s focus is anticipated to impact approximately 170 jobs at the site and at Arla Foods Ingredients’ headquarters in Aarhus, Denmark.
Cubel acknowledged the challenges posed by this transition, stating, that it goes without saying that this is a difficult situation and a tough day for the employees.
“The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected,” he said.
“The employees are highly skilled, and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable.”
Arla plans to collaborate closely with customers during the 19-month transition period to ensure their needs are met before discontinuing ELN production at ARINCO by the end of Q1 2026.
This strategic move follows several recent investments by Arla in Denmark. Last month, the company invested approximately DKK 200 million (around US$29 million) in its Esbjerg Dairy Center to support the growth of its milk-based beverage segment.
Earlier this year, Arla introduced a customer partnership sustainability initiative in Denmark and unveiled plans for constructing an electric heat pump at its primary processing plant in the country, backed by a €32 million investment.
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