Arla to consolidate plants in Sweden and Denmark

Arla’s yellow cheese production is to be rationalised to counter international competition and declining milk volumes in Sweden. Yesterday, A structure plan has been approved to consolidate part of the yellow cheese production at the plants at Nr. Vium and Taulov in Denmark, which will be significantly upgraded. The investment will have implications for Sweden’s Falkenberg Dairy and possibly the Danish Klovborg and Hj&oslash,rring dairies.
As a result of the tough competition in international markets for yellow cheese, a DKK 615 million (EUR82.5m) investment has been approved for the dairies at Nr. Vium and Taulov. This decision results in a closure of the Swedish dairy Falkenberg, and is expected to eventually lead to the closure of the two Danish dairies, Klovborg and Hj&oslash,rring. The measures will secure Arla’s future production of a broad range of yellow cheeses at competitive prices, the company says.
Milk volumes have been declining in Sweden since 2003 and to avoid empty plants, and to maximise the milk price paid to the co-operative owners, Falkenberg dairy will be closed. Its cheese production will be transferred to the Danish dairy in Nr. Vium, which will benefit from an expansion programme amounting to DKK 125 million (EUR16.7m) over the next year.

Over a three-year period, Arla will expand the dairy in Taulov, which will result in more efficient production, improved competitiveness and, therefore, secure employment in Denmark and Sweden in the future.

With the planned investment, the Taulov dairy will reach production of up to 45,000 tonnes of cheese per year. This will increase the capacity at the dairy with more than 60%. At the same time the capacity at Nr. Vium will go up to 59,000 tonnes, which is equivalent to a 34% increase.