Arla Foods eyeing African dairy opportunities

The Denmark-based dairy cooperative, which is owned by more than 12,000 milk suppliers in Sweden, Germany, Luxembourg, Belgium, the UK, and Denmark, has entered into a sales partnership with Abidjan-based distribution firm, Mata Holdings.

From its new address in the Ivorian capital, Dano brand milk powder manufactured at Arla’s processing plant in Akafa, Denmark will be packed into 25g metallic sachets in the company's new custom-made mobile packaging unit, which is expected to arrive in Abidjan soon.

The sachets, which contain the exact amount of milk powder needed for one glass of milk, will then be distributed by Mata Holdings to thousands of shops across the Ivory Coast.

Speaking with DairyReporter.com, Arla Foods spokesman Theis Brøgger, said that the cooperative’s partnership with Mata Holdings is essential if it is to navigate the Ivory Coast’s “complex sales channels.”​

“It was crucial to find a strong sales and distribution partner in the Ivory Coast,”​ said Brøgger. “They will distribute our product, which requires knowledge of the market and the complex sales channels in the Ivory Coast.”​

“There aren’t many big supermarkets in the Ivory Coast, it is mostly small shops. So we needed a partner with knowledge of the market.”​

Expect more African activity​

Arla has branded its agreement with Mata Holdings as the “first in the pipeline of up to five joint ventures in Africa.”​

“We have had business in Africa before - exports to North Africa and some Sub Saharan countries - but now we are launching the mobile packaging unit, which allows us to ship the milk powder to the Ivory Coast and pack it on site,”​ said Brøgger.

Brøgger told this publication to expect more “activity”​ from the company in Africa – pinpointing Ghana, Nigeria and Egypt as potential targets.

“You will probably see more activity from us in other African nations,”​

“Expect more joint ventures. This is not the only country we are focusing on.”​

"We expect there to be other opportunities in neighbouring countries. We are likely to focus on a number of countries, including Nigeria and Ghana. This is something we are looking into.”​

“The rapidly growing middle class in these countries are looking to add more nutritious items such as dairy to their diets​,” said Brøgger “We can play a role there.”​

Testing the market​

In July 2013, Arla announced plans to ship a custom-made mobile packaging unit from Denmark to Africa to test the level of demand for its powdered milk products.

The 90 square metre facility, which is fashioned from three 400 foot shipping containers, has an annual production capacity of 2,000 tonnes.

Once the level of demand for its Dano brand milk powder has been established, Arla could expand its dairy offering in the country, said Brøgger.

“That is the next step,”​ he said. “There could be other products in future.”​