Middle East acquisition strengthens supply chain efficiency for Arla Foods
Parts of the production at three Arla Foods sites will be moved to newly acquired site in the Middle East as part of the farmer-owned company’s aim to bring new commercial opportunities to customers as well as its ongoing efforts to make its supply chain more efficient.
In May 2019, Arla acquired Mondeléz International’s processed cheese business in the Middle East region, which is currently licensed under the Kraft brand.
Following the acquisition, Arla is planning to move certain processed cheese and sterilised cream production lines from its Bislev and AKAFA sites in Denmark and from its Riyadh site in Saudi Arabia – all to the newly acquired site in Manama in Bahrain. This will enable Arla to further expand the company’s branded cheese production in the region Middle East and North Africa (MENA) and to further improve overall efficiency in its supply chain.
“It makes a lot of sense for us to place the production of these exact products at the newly acquired site in Bahrain, since these products are primarily made for the Middle East and North Africa and in lesser degree for other markets. It gives us a strong regional supply chain footprint that enables us to secure long-term competitiveness in the region through scale and efficiency, and the pilot plant at our new Bahrain site will allow us to innovate in new ways within this category,” said head of supply chain in Arla, executive vice president Sami Naffakh.
The move is not expected to take place until late 2020 and mid-2021, but Arla Foods is announcing the change in advance time to ensure a smooth and transparent transition as well as timely solutions for affected staff.
“It is important for us to be as open about the future as we can be with our employees, and since the coming months will require a high degree of involvement of staff at each affected site we have decided to inform our employees now about the decision to move parts of our production to the new site in Bahrain,” said Sami Naffakh.
“As soon as we are able to confirm the exact volumes that will be moved, we will engage with affected employees to ensure they are supported to move on in a good way, either to jobs at other Arla production sites or outside Arla. We have a good track record of finding ways to help people into new job opportunities, especially when there is a relatively long time period of time in which to work this out. They can bring valuable production expertise to our other sites, which is an opportunity we do not want to miss.”