Arla Foods to build new milk powder factory in Sweden

Following a board meeting last Thursday, Arla Foods has announced that the Group plans to invest DKK 560 million in a new milk powder plant in Vimmerby, Sweden.

The plant will have an annual capacity of 380 million kg milk, i.e. approximately 20% of Arla Foods’ overall milk volume in Sweden. Construction of the plant, which will produce approx. 44,000 tons milk powder per year is to begin in March provided Arla Foods obtains the necessary environmental approvals. Expected completion of the project is October 2004.

In March, Arla Foods and Vimmerby local council signed an agreement which has enabled Arla Foods to commence detailed planning for the plant which is part of the Group’s structure and strategy plan of 2001.

Once the new milk powder factory is commissioned, the existing milk powder facilities in Mjölby and Kimstad will both close with a loss of 75 jobs.

The current milk powder production at Kjersing near Esbjerg in Denmark will also cease, while the plants at Akafa and Arinco will be expanded. Milk powder production at Arla Foods' dairies in Kalmar and Falkenberg will be affected, too, in that the two dairies’ production of milk powder will be transferred to Vimmerby. However, cheese production at both dairies will be expanded.

The Vimmerby plant is also set to take over milk production from Götene. In turn, Götene will produce buttermilk powder, a production which fits better with the dairy’s production of butter and spreads.

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