The Danish-based dairy cooperative said the move supports its Strategy 2020 by moving more milk from bulk into branded retail sales and foodservice.
It is almost a 50% increase on the €227m ($243m) invested in 2016.
Most focus on production upgrades to increase profitability of products sold in Germany, UK, Denmark, Sweden, the Netherlands and Finland, as well as on production sites that supply dairy products to Arla’s emerging markets outside the EU.
Making mozzarella matter
Arla expects 50% of its growth up to 2020 to come from Europe, with the other 50% from emerging markets outside Europe, with Arla’s strategic focus on the Middle East and North Africa, China and Southeast Asia, Sub-Saharan Africa and the US.
Arla also said a part of its ‘Good Growth 2020’ strategy is to grow foodservice sales significantly by 2020. It said that around €18m ($19m) of this year’s investments will go into expanding and developing production for foodservice customers.
One such investment is €13m ($13.9m) at the Rødkærsbro dairy in Denmark, which is one of the leading mozzarella sites in the world. By investing in new technology, Arla says it will expand production of mozzarella for the international pizza industry.
Whey protein and lactose
The Denmark Protein site, near Videbæk, which produces protein, lactose and other value-added whey-based ingredients for global use, is the Arla site receiving the biggest total investment in 2017, with a €30.6m ($32.7m) injection.
The money will be spent on a general upgrade and expansion of production facilities, including improvements to the site’s protein and lactose processing.
Povl Krogsgaard, vice-CEO and executive vice president of Arla’s supply chain, said it aimed to be a global leader in natural whey ingredients for producers in categories such as bakery, beverages, dairy and ice cream, and medical, infant and sports nutrition.
“The investment in our Denmark Protein site is key to meeting that ambition and it will help us build on an already strong and profitable part of Arla’s business,” Krogsgaard said.
New packaging for spreadable cheese
The company is also investing more than €12m ($12.8m) in its cream cheese dairy site in Holstebro, Denmark, to introduce new packaging designs.
Phase one of the project is expected to be completed by the end of 2017, with phase two to follow in 2018.
Across all sites, €22m ($23.5m) will be spent on operating efficiency to keep operational cost low.
The 2017 investment also includes 150 projects at a total cost of about €5m ($5.3m) aimed at improving energy efficiency.
Arla Foods UK plans to spend approximately £37.5m ($46.6m) on its UK sites.
The funds will be spread across all 13 UK production, packing and distribution sites, as well its logistics operation.
Taw Valley creamery, in Devon, will see £5m ($6.2m) to further develop capacity, while the same amount will be spent at Stourton dairy, in Leeds, on projects including a new packing facility that will allow it to increase production of own-label flavored milk.
A significant proportion of the £3.5m ($4.3m) at Arla’s fresh milk processing site in Aylesbury will go on new processing equipment for Arla B.O.B.
The Westbury operation in Wiltshire, home to Anchor butter, will see £3m ($3.7m) spent on supporting facilities to ensure continuous production during planned essential maintenance.