By investing DKK 1.75 billion in China the message is clear. Arla believes in the Chinese market. The investment is part of Arla’s strategy to fivefold its sale in China by 2016 from DKK 700 million in 2011 to DKK 3.5 billion in 2016, they tell in their half year report.
In June 2012, Arla was chosen as a strategic partner of COFCO, which is the majority shareholder in Mengniu, China’s largest dairy. This is helping Arla gain access to one of the world’s fastest growing dairy markets. Arla consider the agreement as recognition of its global strategy and network, as an indication that they, as a company, are a leader when it comes to quality and food safety.
China’s growing middle class is demanding quality products with a focus on safety. Arla can deliver this with their new export agreement. And on the basis of the Arlagården quality programme, they want to simultaneously educate Chinese farmers about the quality of products and how they can be part of proving food for 1.3 billion Chinese people.
Milk production in Europe is in growth, making it necessary for Arla and other European dairy companies to sell more milk outside Europe. Arla took the opportunity of a strategic partnership in China. Its billion kroner investment in China’s largest dairy Mengniu will multiply its exports of European Arla milk to China in the long term. The target in the future is to export 600-800 million kilograms of milk to China each year, primarily in the form of value-added products.
The agreement with China provides Arla with stability in a turbulent world market. The Chinese want to draw on our knowledge and experience in order to ensure the best milk quality, traceability and controlled milk production on farm.