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Arla Foods to close US plant in efficiency drive

By Mark Astley , 22-Aug-2012

Arla Foods has announced plans to close one of its two US dairy plants, as part of a drive to streamline its US business and refocus on speciality cheese.

The Danish dairy co-operative will close its Muskegon facility in Michigan on 31 December 2012 following the transfer of production from the plant to another in Denmark in the upcoming Autumn months.

Around 20 jobs will be lost at the Michigan-based plant once production ends, the company confirmed.

The firm, which currently markets brands including Lurpak, Castello, Saga and Denmark's Finest in the US, hopes the transfer of production will lead to better efficiencies – owing to the fact that it will be part of the Arla’s total global market production.

Arla spokesperson Theis Brøgger told DairyReporter.com that the closure was, however, not about cutting costs but about improving its speciality cheese offering to US consumers.

Speciality cheese offering

“This closure will make us more cost effective,” said Brøgger. “But this decision is not about cutting costs in the US. This is about streamlining our US business and adapting the products we manufacture and market in the country.”

“That meant bringing an end to production at the Michigan plant.”

Brøgger added that sales of the products produced at the Michigan facility had not been “satisfactory.”

“This, combined with the fact we already produce these products in Denmark, made it an easy decision. The timing seemed right.”

Along with the closure of its Michigan-based plant, Arla will also withdraw its Saga-brand Blue Brie from the US market.

The brie-style cheese, which has been sold in the US for 30 years, will continue to be manufactured and marketed under Arla’s Castello brand.

Brøgger added that as well as re-branding its popular Blue Brie product, the firm has informed retailers that it intends to introduce a number of speciality cheeses produced at its European dairies to the US market.

Plant unaffected

While production will be slowed in the next few months at the Muskegon plant, production at Arla’s remaining Hollandstown, Wisconsin plant will be unaffected.

“Production at our main, and soon to be only US plant, is going from strength to strength and we are showing good growth in the US,” added Brøgger.

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