Arla to Increase Production in Wisconsin

18/02/08 Arla Foods plans to invest around 75 million DKK (approx. 15 million USD) in Hollandtown Dairy, its American yellow cheese dairy. Eventually, the aim is to more than double production capacity.

"Over the past years, we've shown that we can grow the US business. For us to maintain our growth, we plan to channel further investments into the company," says director of Arla Foods' international markets, Tim Ørting Jørgensen.

In 2008 and 2009, the dairy in Hollandtown, Wisconsin, will be extended to include a brining facility, likely to come from the now defunct Aars dairy in Denmark, as well as two packing lines. Parts of the dairy will also be upgraded to improve the production flow and raise capacity from 8,000 to 10,000 tons. The 30 million DKK investment (approx. 6 million DKK) for 2008 was recently approved by Arla Foods' Supervisory Board.

Further investments are in the pipeline and are aimed at increasing the dairy's production capacity to 20,000 tons over the next four-five years.

"We need the initial investment to meet our customers' demands. The combination of local production and imports has proved successful. The fact that we can offer both means that customers are taking us seriously. And we believe that the subsequent investments will make a further contribution to the Group's revenue. At the same time, this is a great message to send to our many skilled and loyal employees at the dairy," says Andrew Simpson, Head of Arla Foods USA.

Arla Foods has run a licenced production at Hollandtown in Wisconsin since 1997. The Group bought the plant in early 2006 when the dairy was threatened with closure. Last year, sales of yellow cheese from Hollandtown increased by 19 per cent. Arla Foods US sales last year totalled 13,500 tons. Besides the dairy in Wisconsin, Arla Foods has production in Michigan at the former Tholstrup dairy (mould cheese).