Arla builds US$204m facility in Germany to meet demand for sustainable and nutritious dairy products

GERMANY – Danish multinational dairy cooperative, Arla Foods has committed €190 million (US$204 million) investment to a production facility in Germany in order to meet the demand for sustainable and nutritious dairy products.

The cooperative said that the investment which is the biggest investment to date for the company is a 55-hectare production plant with the capacity to supply specialized long-life dairy products to 70 countries.

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The facility includes a production plant with a 51-meter-high drying tower that can process 685 million kilograms of milk a year with anticipation of the end product to be around 90,000 metric tons of milk powder.

According to the company’s plan, roughly 12 construction sites will be installed on the whole site over the course of the project, facilitating the expansion of the milk collection area and milk tanks to the energy supply and wastewater treatment plant.

The mega-facility is based in Pronsfeld and will draw milk from farmers in Rhineland-Palatinate, North Rhine-Westphalia, Luxembourg, and Belgium, including Wallonia and Flanders.

The facility’s primary function is to increase the production of milk powder while supporting the company’s expected annual branded volume growth of 5-7% in international business, which is in line with its five-year strategy called Future26.

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It will also manufacture products for B2B for the food industry, which processes milk powder into chocolate or baked goods.

“We will strengthen and expand our business in international markets such as the Middle East, West Africa, and Southeast Asia, where the demand for affordable, nutritious dairy products exceeds local production and supply,” says Peder Tuborgh, CEO, of Arla Foods.

The facility has a new, environmentally friendly, technical setup for electricity and heat generation called combined heat and power (CHP) and processing cooling.  

The new technology is expected to reduce the carbon footprint and electricity consumption by about 1,200 metric tons of CO2e per year and 1,800-megawatt-hours of electricity compared to a traditional cooling solution.

“This is an important step in the evolution of our manufacturing footprint toward more efficient and decarbonized dairy production, building on our strengths here in Germany and leveraging the latest technologies,” says David Boulanger, executive VP, and head, of Arla supply chain.

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Arla has further resolved to purchase green electricity certificates corresponding to the CO2e emissions for both the gas and electricity as a short-term solution, as there is currently no green energy alternative to the natural gas used for the new production facility.

The cooperative is also looking into replacing 25% of the natural gas used in the new technical setup with hydrogen.

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