The move is to support the increasing demands for dairy in the Middle East and North Africa (MENA).
The company will invest approximately €50m ($55m) in the site over the next two to three years to increase capacity as it becomes the key strategic manufacturing hub for the company in MENA. Arla will also create more than 100 direct jobs over the next two to three years in the local market.
The opening follows Arla’s acquisition of Mondeléz International’s processed cheese business in the region in May 2019, which also gave it full ownership of the production site.
The majority of Arla’s products sold in the region will now be produced locally at the site in Manama, which will enable the company to further expand its branded cheese production and improve overall efficiency in its supply chain. By 2025, Arla expects to increase annual production in Bahrain to more than 100,000 tons under the Puck, Arla, Dano, Kraft and private label brands while creating new jobs in the process.
By moving the production of processed cheese and sterilized cream to this site, Arla expects to improve the shelf-life of these products by up to six weeks as transport and distribution are reduced significantly. Product categories produced at the site will be sold primarily in the Middle East as well as the US, West Africa and Southeast Asia.
Speaking at the event, Arla Foods CEO, Peder Tuborgh, said, “The Middle East and North Africa is a priority market for us and the inauguration of this production site in the Kingdom of Bahrain consolidates our commitment to the region. Our decision to make Bahrain our key manufacturing hub for the MENA region demonstrates our confidence in the Kingdom’s rapidly-growing manufacturing sector and alignment with the nation’s Vision 2030 economic diversification plans.”
Tuborgh said the new facility will enable Arla to increase production and step change its innovation speed to meet increasing consumer demand.
“We are confident that Bahrain will be instrumental to the success of Arla’s growth plans and we are grateful to our local partners and the government whose unwavering support and dedication have made today possible,” he added.
Since 2010, Arla has more than doubled its sales organically across the MENA region, which is the company’s largest commercial area outside Europe, through cheese under the Puck brand, butter and spreads under the Lurpak brand, and milk powder and UHT milk under the Dano and Arla brands.
In 2018, Arla’s retail and foodservice revenue in the MENA region reached €560m ($623m).