Dairy Dialog podcast 15: Arla Foods and IDC

By Jim Cornall

- Last updated on GMT

Interviews with Arla Foods and International Dispensing Corporation.
Interviews with Arla Foods and International Dispensing Corporation.

Related tags Arla foods Arla Mondelez Kraft MENA

This week’s Dairy Dialog podcast takes a look at this week’s acquisition by Arla Foods, as well as US company International Dispensing Corporation's (IDC) hopes of helping the dairy market in Pakistan.

Dairy cooperative Arla Foods this week made an agreement with American multinational confectionery, food, and beverage company Mondeléz International to acquire its processed cheese business in the Middle East region, which is currently licensed under the Kraft brand.

The acquisition also gives Arla full ownership of a cheese production site in Bahrain, which Arla said gives the company the opportunity to further expand its branded cheese production in the region.

The company expects its MENA retail and foodservice sales to reach approximately €560m ($637m) this year.

Until now, most of Arla’s products sold in the MENA region have been produced in Europe, with some local production in Riyadh, Saudi Arabia. However, with Arla’s capacity nearly maximized for processed cheese, Arla said this deal delivers much-needed capacity and creates a strong regional supply chain footprint to secure long-term competitiveness in the region through scale and efficiency.

The production site is located in Manama, Bahrain, and has a capacity exceeding 66,000 tons. Built in 2008, it includes an on-site innovation pilot plant and has won multiple awards for manufacturing excellence within core cheese categories.

DairyReporter spoke with head of Middle East & North Africa at Arla, Rasmus Malmbak Kjeldsen, about the deal.

IDC sets up IDC SAMEA to transform developing world dairy industry

New York-based IDC has established IDC SAMEA (Southwest Asia, Middle East, Africa), a regional office based in Dubai.

The purpose of IDC SAMEA is to enable, coordinate, and execute turn-key solutions for a large-format aseptic package with The Answer tap, first to penetrate and transform the dairy industry of Pakistan, and subsequently those of neighboring countries with similar dairy issues.

IDC SAMEA will manage the entire supply chain – taps, bags, filling equipment, boxes and/or dispensers.

Pakistan is the world’s fourth largest dairy consuming country, yet less than 10% of the country’s milk is processed and packaged. The rest is in the form of “loose” milk: raw unprocessed milk served from open vats.

IDC SAMEA and its customers will offer fresh milk directly from dairy farms, aseptically processed and packaged in a closed bag-in-box (BIB) system anchored by The Answer, the world’s only aseptic dispensing tap.

The group also intends to address similar dairy markets in Bangladesh, India, Turkey, and Africa. IDC SAMEA has already begun marketing the solution in Africa, though Pakistan represents the most imminent opportunity.

IDC said the closed bulk aseptic package has the potential to improve milk quality, safety, waste, and nutrition for more than 2bn people in those countries.

DairyReporter spoke with Greg Abbott, chairman of IDC, about the move into the Pakistan market.

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