Arla Foods opens new cheese production site in Bahrain

Arla Foods has inaugurated a state-of-the-art cheese production site in the Kingdom of Bahrain to support the increasing demands for dairy in the Middle East and North Africa (MENA).

The company will invest approximately €50 million in the site over the next two to three years to increase capacity as it becomes the key strategic manufacturing hub for the company in MENA. Arla will also create more than 100 direct jobs over the next two to three years in the local market. The opening follows Arla’s acquisition of Mondeléz International’s processed cheese business in the region in May 2019, which also gave it full ownership of the production site.

The majority of Arla’s products sold in the region will now be produced locally at the site in Manama, which will enable the company to further expand its branded cheese production and improve overall efficiency in its supply chain. By 2025, Arla expects to increase annual production in Bahrain to more than 100,000 tons under its Puck, Arla, Dano, Kraft and Private Label brands while creating new jobs in the process.

By moving the production of processed cheese and sterilised cream to this new site, Arla expects to improve the shelf-life of products by up to six weeks as transport and distribution are reduced significantly. Product categories produced at the site will be sold primarily in the Middle East as well as US, West Africa and Southeast Asia.

His Excellency Zayed Rashid Alzayani, Minister of Industry, Commerce & Tourism said, “We are delighted to welcome Arla to be part of Bahrain’s manufacturing landscape. As a vital member of “Team Bahrain”, the Ministry of Industry, Commerce & Tourism shall continue to play its role in the attraction of FDI, facilitation of doing business and supporting growth in line with our economic diversification and expansion plans.”

Khalid Humaidan, chief executive, Bahrain EDB said: “Arla is the latest in a long line of international manufacturing companies to make Bahrain a home for their regional operations. Today’s inauguration of Arla’s largest facility outside Europe is testament to Bahrain’s position as a leading destination for manufacturing companies looking to access the region’s $1.5 trillion market. The Kingdom offers investors a number of competitive advantages, including the availability of a highly skilled local work force and highly competitive operating costs.

“Arla is a great addition to our manufacturing sector, one of the pillars of the Kingdom’s economy, where manufacturing now accounts for over 14% of Bahrain’s GDP, the second largest non-oil sector. Arla’s investment will create a number of jobs in the local market and will play a key role in supporting our diversification efforts, in line with Bahrain’s Economic Vision 2030.”

Arla Foods CEO Peder Tuborgh said: “The Middle East and North Africa is a priority market for us and the inauguration of this production site in the Kingdom of Bahrain consolidates our commitment to the region. Our decision to make Bahrain our key manufacturing hub for the MENA region demonstrates our confidence in the Kingdom’s rapidly-growing manufacturing sector and alignment with the nation’s Vision 2030 economic diversification plans.

“Dairy is an integral part of a healthy diet and this new facility will enable us to increase production and step change our innovation speed to meet increasing consumer demand. We are confident that Bahrain will be instrumental to the success of Arla’s growth plans and we are grateful to our local partners and the government whose unwavering support and dedication have made today possible.”

Since 2010, Arla has more than doubled its sales organically across the MENA region, which is the company’s largest commercial area outside Europe, through strong positions in cheese under the Puck brand, butter and spreads under the Lurpak brand as well as milk powder and UHT milk under the Dano and Arla brands.

In 2018, Arla’s retail and foodservice revenue in the MENA region reached €560 million.

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