Arla Foods to shift some production to the Middle East
MANAMA, BAHRAIN — Arla Foods, an international dairy cooperative, has unveiled plans to move certain processed cheese and sterilized cream production lines from three of its sites to a newly acquired location in the Middle East.
Arla Foods said production from its Bislev and AKAFA sites in Denmark and from its Riyadh site in Saudi Arabia will be moved to a site in Manama in Bahrain. Arla acquired the site in Manama from Mondelez International as part of its recent acquisition of the latter’s Kraft branded cheese business in the Middle East and Africa.
“It makes a lot of sense for us to place the production of these exact products at the newly acquired site in Bahrain, since these products are primarily made for the Middle East and North Africa and in lesser degree for other markets,” said Sami Naffakh, executive vice-president and head of supply chain for Arla Foods. “It gives us a strong regional supply chain footprint that enables us to secure long-term competitiveness in the region through scale and efficiency, and the pilot plant at our new Bahrain site will allow us to innovate in new ways within this category.”
Built in 2008, the new site in Manama has capacity exceeding 66,000 tons and includes an on-site innovation pilot plant. By moving the production of processed cheese and sterilized cream to the Manama site Arla Foods said it expects to improve the shelf life of these products by four weeks.
Arla Foods said it does not expect the transfer of production lines to be implemented until late 2020 and mid-2021.
“It is important for us to be as open about the future as we can be with our employees, and since the coming months will require a high degree of involvement of staff at each affected site we have decided to inform our employees now about the decision to move parts of our production to the new site in Bahrain,” Mr. Naffakh said. “As soon as we are able to confirm the exact volumes that will be moved, we will engage with affected employees to ensure they are supported to move on in a good way, either to jobs at other Arla production sites or outside Arla. We have a good track record of finding ways to help people into new job opportunities, especially when there is a relatively long time period of time in which to work this out. They can bring valuable production expertise to our other sites, which is an opportunity we do not want to miss.”
Arla Foods is owned by 11,200 farmers from Denmark, Sweden, the United Kingdom, Germany, Belgium, Luxemburg and The Netherlands and produces a range of dairy products under brand names including Arla, Lurpak and Castello.