New briefs: Dean Foods, Arla and kosher cheese

By Neil Merrett

- Last updated on GMT

Related tags: Cheese

This week, Dean Foods fails to profit form full year sales
improvements, Arla moves to expand cheese production in the US, and
Willi Foods finalises an agreement to produce kosher dairy in
Denmark.

Dean Foods struggles with milk costs ​Dean Foods' full year sales were up 17 per cent to $11.8bn, though the company continued to struggle with high milk costs. Operating profit over the twelve-month period ending 31 December 2007 fell 18 per cent to $553m, the company said. Operating margins over the period fell by 1.8 percentage points to 6.4 per cent. Group chairman Gregg Engles said that the impact of commodity prices for both its organic and regular dairy operations, had made 2007 a year of unprecedented challenges for the company. "We were faced with steeply rising and record high dairy commodity costs in our dairy group operations,"​ he stated. "At the same time, WhiteWave Foods was challenged by a severe oversupply of organic milk that drove down realized prices and increased competitive intensity in the industry."​ Engles added that although the company was confident of adapting to the high commodity cost environment in the long term, further volatility in milk prices was to be expected. "It's clear that our results will continue to be driven primarily by swings in the dairy commodity markets, including the organic milk market,"​ he stated. Arla expandsUScheese plans ​Arla Foods say it is looking to invest DKK75m (€10m) in its US yellow cheese operations, by expanding capacity at its Hollandtown Dairy in the US. The European-based cooperative said today that the dairy will be extended over the next two years with the addition of a brining facility and two packing lines. The brining facility is expected to be supplied from existing equipment at the group's now defunct Aars dairy in Denmark, the company said. Additional improvements are also expected at the site in a bid by the company to improve production flow and raise capacity from 8,000 to 10,000 tonnes, Arla said. Despite, recent difficulties in Arla's core European cheese operations, Tim Ørting Jørgensen, group director for international markets, said cheese production within the US has been a strong earner for the company. "Over the past years, we've shown that we can grow theUSbusiness,"​ he stated. "For us to maintain our growth, we plan to channel further investments into the company."​ According to Arla Foods, sales of yellow cheese manufactured at the Hollandtown plant, which was acquired by the company in 2006, rose by 19 per cent, amounting to an output of 13,500 tonnes. Willi Foods confirms Danish kosher agreement ​Willi Foods, an international supplier of kosher food products, has finalised an agreement for the purchase of a controlling stake in an unnamed Denmark-based dairy distributor. The deal, which was made through its 90 per cent owned subsidiary Gold Frost, will allow Willi Foods to claim a 51 per cent stake in the company. The purchase will extend the company's presence in Kosher cheese production, according to the group. Under the agreement, the new venture will produce a variety of non-kosher and kosher dairy goods including blue cheese, edam, gouda, havarti and feta. The deal is expected to be completed by the end of this month, with the first purchase orders for the venture expected later during the financial quarter, Willi Foods said.

Related topics: Markets, Dean Foods, Arla Foods, Cheese

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