Arla Foods, DMK joint ingredients venture begins WPC, lactose production

11-Aug-2014 - Last updated on 01-Sep-2014 at 14:21 GMT

ArNoCo's Nordhackstedt plant.

Arla Foods Ingredients (AFI) joint venture ArNoCo has begun production of whey protein concentrate (WPC) and lactose at its newly-constructed €50m (US$66.8m) plant in Germany.

ArNoCo, a 50/50 joint venture between AFI and German dairy cooperative DMK, will process around 700,000 tonnes of whey at the plant in Nordhackstedt, near the Danish border.

Whey, supplied by a neighbouring DMK plant producing mozzarella and Gouda, will be converted by ArNoCo into WPC for use in the dairy, nutrition, and bakery sectors, said AFI.

An additional 25,000 tonnes of lactose will be produced at the plant and sold as AFI Dry Blend for infant formula.

Currently running at around 80%, Nordhackstedt should reach full capacity in September 2014, said AFI.

AFI and DMK first announced plans to establish ArNoCo - a 50/50 joint venture - in March 2011.

Each agreed to invest €44m (€58.8m) in ArNoCo, with €35m (€46.7m) initially set aside to to finance the construction of the Nordhackstedt plant.

Now operational, the Nordhackstedt whey processing facility will "enhance" AFI's position in the global supply of WPC and lactose, said Hans Jørgen Lauridsen, project director, ArNoCo.

“The market for these products is growing faster than the ingredients industry can supply them, so the establishment of ArNoCo in cooperation with DMK is a significant development," he said.

While established in 2011, the joint venture with DMK is in line with Arla Foods latest five-year growth plan, Strategy 2017.

Among the targets set by Arla Foods in 2013, AFI was challenged to double its revenue by 2017 to 5bn DKK (US$900m, €760m).