Dairy company Arla delivers '˜strong results in tough times'

DAIRY company Arla Foods said it had achieved strong results in tough times, as falling market prices in Europe hit its half year revenues.

The bottling plant at Arla Foods, Stourton, Leeds.

Arla, which has a processing plant at Stourton, on the outskirts of Leeds, said the outlook for the second half of 2016 is positive, and it expects improvements in its milk price to farmers.

Arla’s revenue for the first half of 2016 amounted to 4.9 billion euros, a decrease of 5.3 per cent compared with the first half of 2015. Arla’s total milk volume in the first half of 2016 increased 1.9 per cent to 7.2 billion kg.

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Peder Tuborgh, the chief executive of Arla, said: “In a very difficult market environment, we have continued to improve the quality of our business by relentlessly pursuing our strategic direction.

“Our dairies have effectively processed 119 million kg extra milk from our owners, and our commercial teams in all markets have proactively ensured that this extra volume has been sold into retail and food service channels, avoiding it being used for the production of less profitable commodity products. This is crucial at a time when Arla and our farmer-owners continue to be challenged by the global market decline.”

Milk volumes are flattening in Europe and, as a result, market prices are levelling out, Arla said. A more stable market is expected in the second half of 2016.