Arla benefits from UK dairy boom

By Neil Merrett

- Last updated on GMT

Related tags: Chief executive officer, Executive officer, Arla foods

The UK division of dairy cooperative Arla Foods is expected to
exceed last year's record earnings, the company said this week,
in announcing the group was doubling its profit forecast
for next year to DKK600m (€80m).

Arla said on Monday that profit for its UK operations during the current financial year could be up by as much DKK300m (€40m) over previous estimates for the period. The company decided in January to acquire the remaining shares in it did not already hold in Arla UK. The announcement reflects the importance to dairy processors of diversifying operations into new markets to offset declines in other regions. Despite some recent difficulties in the company's domestic Scandinavian operations, Arla's UK operations now appeared to have turned a corner, stated group chief executive officer Peder Tuborgh. "Our history in theUKhas been characterised by tough times and theUKbusiness has been a major preoccupation for us - sometimes negatively,"​ he stated. "But as things stand now, there are no grounds for any further scepticism."​ The group attributed the turnaround to a number of factors, including a bouyant UK dairy market, a factor that Arla said has allowed it to increase the prices for its goods. The company added that it had also benefited from improved operating efficiency. Upon having acquired full ownership of its business in the UK, the company added that it was better equipped to tackle supply issues by re-allocating milk and cream among its national operations as needed. The news could come as a major lift for the group, which has had some difficulties of late with its operations across Europe. In September, Arla said that 187 of its members announced their intention to leave the co-operative, resulting in a reduction of 300m kg worth of milk annually.

Related topics: Arla Foods, Manufacturers

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