Arla Foods to invest US$55m in newly opened cheese production site in Bahrain

BAHRAIN Danish dairy company, Arla Foods has inaugurated a state-of-the-art cheese production site in the Kingdom of Bahrain to enable the company meet the increasing demands for dairy in the Middle East and North Africa (MENA).

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.

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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.

Arla has identified Bahrain as the company’s key strategic manufacturing hub in MENA and has unveiled plans of investing approximately €50 million ($55 million) in the site over the next two to three years.

Arla said that the investment will increase the facility’s production capacity and create more than 100 direct jobs in the local market.

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.

“Dairy is an integral part of a healthy diet and this new facility will enable us to increase production and step change our 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.”

Currently, Arla Foods produces approximately 16,000 tons per year and includes an on-site innovation pilot plant.

By 2025, Arla expects to increase annual production in Bahrain to more than 100,000 tons under both Puck, Arla, Dano, Kraft and Private Label brands.

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 US, West Africa and Southeast Asia.

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 strong positions in cheese, butter, spreads as well as milk powder and UHT milk

In 2018, Arla’s retail and foodservice revenue in the MENA region reached EUR 560 million.

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