Revenues milestone as Arla mergers pay off

Peter Lauritzen, CEO of Arla Foods UKPeter Lauritzen, CEO of Arla Foods UK
Peter Lauritzen, CEO of Arla Foods UK
REVENUES at Arla Foods’ UK business smashed through the £1bn barrier in the first six months of the year following its merger with Milk Link to create the country’s biggest dairy business.

The Leeds-based subsidiary of the Danish co-operative generated turnover of £1.1bn, out of total group sales of £4.08bn.

Group net profit more than doubled to £120m, up from £56.8m the same time last year, as Arla started to realise the benefits of mergers in the UK and Germany.

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Peter Lauritzen, chief executive of the UK business, told the Yorkshire Post: “The UK is one of Arla Foods’ core markets and the business group contributes 26 per cent, the largest percentage, of total group turnover.

“Key highlights for the UK during the first half of the year include the continued integration of the Milk Link business, with which Arla merged in October 2012.

“This is progressing very well and we are already realising the benefits identified in the business plan.

“The construction and commissioning of our new one-billion litre dairy at Aylesbury has also been a major focus and this is continuing to schedule, with commercial production due to commence in the autumn as planned.”

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Group revenues rose by 19 per cent during the period, which Arla said was driven by organic growth in its core and growth markets.

Arla said the milk price paid to its owners increased three times during the first half of the year, and a further increase is due in September.

Arla operates in Sweden, Germany, Denmark, Finland and the Netherlands in Europe and the growth markets of the Middle East and Africa, Russia and China.

Frederik Lotz, the chief financial officer, said the global dairy market is more volatile than ever.

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“Demand is increasing steadily, while milk production varies from season to season, creating frequent and considerable fluctuations in milk prices,” he added, vowing to keep a firm eye on costs.

Arla employs around 3,900 people in the UK across its head office, national distribution centre and transport depots in Leeds and at 13 processing and packing sites.

It is planning to close its dairy in Ashby de la Zouch, Leicestershire, next April, which could lead to the loss of 370 jobs.

Meanwhile, Arla is building its largest ever dairy in Aylesbury at a cost of £150m. It has invested £500m in the UK business since 2007.

Arla brands include Lurpak, Cravendale and Anchor.

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