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Arla to invest €12m in infant milk formula production

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By Jim Cornall+

10-Apr-2017

Arla is investing in its AKAFA facility in Svenstrup, northern Denmark.
Arla is investing in its AKAFA facility in Svenstrup, northern Denmark.

Arla is investing approximately €12m ($12.7m) to upgrade its AKAFA production site in northern Denmark, which will allow it to add infant milk formula (IMF) production to its existing powdered milk capacity. 

The investment will not require an expansion of the site, but consists of an upgrade of sections of the site to produce IMF.

Approximately 80% of the production at AKAFA is dedicated to powdered milk for family nutrition, and 20% is sterilized cream. The site’s products are sold in Latin America, Africa, Middle East and Asia.

The new IMF production at AKAFA is expected to start in August 2018, and will create two to four new jobs.

Arla sells IMF products under its own brands like Arla Baby & Me and Milex and is also a supplier to some third party brands. The biggest markets for Arla in the IMF category are China, Southeast Asia, Latin America and Europe.

Rising demand

Henrik Andersen, head of Arla Foods Ingredients, who is also responsible for Arla’s third party manufacturing (TPM) business, said the company is seeing double-digit growth in its global IMF sales, and expects the growth to continue in the coming years due to rising demand in the category worldwide.

Andersen told DairyReporter in China, Arla Food Ingredients sees some segments growing faster than others, with premium and super high premium segments being the ones to watch.

“In these segments our customers are looking for specific ingredients that would make their products unique,” Andersen said.

“And this is exactly what we like to develop, something that is unique and makes a difference in the end product.”

Andersen said, “What we particularly succeed with, in China in particular, but also other places, is the ability to fractionate whey proteins so that we can deliver specific fractions of the whey proteins that are particularly suited, for instance, in infant formula but also for medical purposes.”

Adult nutrition

He added the overall sports nutrition segment of performance nutrition is a huge market globally that is consuming around two thirds of all whey protein delivered to the market.

Andersen said adult nutrition for special medical purposes is also an area where Arla Food Ingredients can make a contribution.

“Some of what we do is driven by the way that we develop our technology in-house and what it can offer the market, and then we have a very good and close dialogue with customers and we say ‘this is something we can do, would it work for you in this application?’” he said.

“In infant formula, it's still the ambition to get as close as possible to human milk working from cow's milk, that's always, you could say, the dream, and we are pursuing that dream together with our customers.”               

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