Profile - Peter Lauritzen: A friendly invasion to spread the word of Arla throughout the UK

It’s the beginning of our interview and Peter Lauritzen, the chief executive of Arla Foods UK, is telling me about his regular trips between Yorkshire and Denmark.

He is heading to his homeland for a board meeting with the parent company later in the afternoon.

“I leave here at 3pm. Fly out of Manchester to Billund. Then one hour drive home. I buy some yoghurt on the way up from the petrol station. Then I’m set. In the morning I’m in the office and then I’m back again. It’s okay.”

“You could go from Leeds to Stavanger,” I offer.

“Yes, but Stavanger, that’s in Norway,” he said, laughing loudly as I try to explain the typical English view of Scandinavia. It’s one that he’s familiar with.

“When I was a young man, I started over here in 1970. I came over and I thought Denmark was the centre of the world and I couldn’t understand the English didn’t know where Denmark was and didn’t know anything about Denmark. I was very disappointed.”

He adds: “We were here, for a period, for two or three hundred years, in the York area. Now we are back again, some of us.”

The ice now broken, the tall, heavily built 62-year-old relaxes and tells me about his international career with one of the world’s biggest dairy companies, Arla’s commitment to the UK, evidenced by its £300m investment in this country, and the lessons he has learned at the top of business.

Lauritzen took on the role in spring 2007, shortly after the company delisted from the London Stock Exchange. There had been tensions between the UK plc and its cooperative parent, so Arla decided to buy the remaining 49 per cent of the shares and drafted in the veteran to integrate the businesses.

Lauritzen was pleased to return, the UK bookending a globetrotting life, and moved to a flat in Harrogate, overlooking The Stray, with his wife, “like young lovers on an adventure”.

Like many business leaders in their sixties, he has the calm and confident air that comes from decades of experience, without the impatience or latent aggression of younger executives with more to prove.

I ask him to share his insights into running a business.

“You have to be honest and you also have to be realistic about things. And you have to deliver the numbers. We all wish for huge turnover and huge profit, but you have to be realistic.

“When something is not going according to plan, put the cards on the table immediately to your superior. Don’t hide things and think they will go away. I have seen that so many times.”

I follow this up with the question: how do you rise to the top of a large organisation?

“I always see people thinking about the next job, not so much the present, very ambitious.

“You have to be happy in the job you are, do that well and if you are doing these things well, then opportunities will come to you.

“It’s up to you to decide whether you turn right or you turn left. You have to have a little luck also.”

He adds: “As a manager, like me for instance, on advice to a younger, new CEO I would say get good people around you. Get the best people and employ people who are cleverer than yourself.

“You have to find the right people for the right positions obviously, but if you do that the chances of success are far bigger than if you don’t do.”

Assuming he has done this at Arla Foods UK, the £1.5bn turnover business still has to operate in a difficult domestic environment.

The UK’s second largest dairy company supplies 26 per cent of the fresh, liquid milk market – 2 billion litres a year – and is responsible for the Lurpak, Cravendale and Anchor brands.

“Consumer confidence is still pretty low,” says Lauritzen. “The economic environment is unpredictable at least. There are challenges ahead. You have a lot of volatility also, specifically in our business, which we didn’t have in the past.”

He is talking about volatility in the commodity market and fluctuating currency rates, set against the background of sovereign debt crises in parts of the European economy. Together, these issues can make setting the right milk price a tricky call.

“We are, whether we like it or not, more dependent on the world market. China, are they buying or not buying? Is there drought in New Zealand? Et cetera, et cetera.”

Lauritzen’s working life has spanned the rise of globalisation. Like many decision makers in Yorkshire, he has to contend with its effects and it’s a question that each and every one has to answer: how best to cope with sometimes chaotic forces.

He says: “You have to follow what is happening and adjust – obviously if it’s something very serious you have to change – but you have to stick with your plans because if you don’t you can easily be put off course.

“You could say, the owners still want to invest in the UK. But they do because they have this long-term view that even though we have volatility we have to do the right thing and get the right structure.”

The UK is a core market for Arla, generating a quarter of its revenues. It employs nearly 3,000 people, including 1,300 in Stourton near Leeds and 130 at Settle in the Yorkshire Dales.

Investment plans include a £150m, zero carbon, mega-dairy on the outskirts of London. It would be Arla’s seventh dairy in the UK.

The parent company has production facilities in 13 countries and sales offices in 20. It has moved into the German market following a merger and has a focus on growth areas in places like the Middle East, China and Russia.

“We are 100 per cent committed to the UK,” he emphasises. “We will be here for the long term. Which is good for our owners and also for the UK farmers and UK industry.”

Arla’s strategic goal is to boost UK revenues to £1.8bn-£2bn by 2015, driven by organic growth and mergers and acquisitions activity.

The company aims to become the number one dairy supplier in the UK, but to do that it must overtake Dairy Crest.

Lauritzen says: “We are closing the gap. I think we will be there shortly.”

He wants to increase awareness of the Arla brand, little known in the UK. It acquired the name in 2000 when MD Foods merged with a Swedish operation bearing the name.

He is also overseeing environmental improvements inside the business and externally in its supply chain to bring Arla “closer to nature”.

Big changes indeed, driven by a man who originally set out to become a police officer.

He had won a place at police school, but needed an interim job in the meantime.

He found work at the dairy cooperative that would later become Arla, which was then an ambitious young business with a vision “to merge all milk into one pot”.

His temporary employers liked what they saw and wanted to keep him. On one condition, he said; that they send him to the UK.

“I wanted to come and see the world,” he said.

He certainly did. After four years in Cheshire, he worked in Italy, Saudi Arabia, Iran, North Africa and other far-flung spots across the planet.

Colleagues describe Lauritzen as a strong leader and someone who empowers others to take responsibility.

I ask him how he is perceived within the organisation, his employer for the past 41 years.

“I don’t really know, to be honest,” he says, quietly, before adding: “I think I’m a guy who delivers.”

Peter Lauritzen Factfile

Date of birth: August 10 1948

Title: Chief Executive Officer, Arla

First job: A trainee ship broker

Education: Haderslev College, Denmark

Last book read: The Yacoubian Building by Alaa Al Aswany

Favourite holiday destination: Italy

Car driven: Audi A8

Favourite song: It is actually a CD – Cained by Michael Caine.

Favourite film: The Godfather

What are you most proud of?: My family. My wife, Young, and my children, Michael and Nina