Arla Foods is moving parts of production at three of its sites to a newly acquired site in the Middle East as part of plans to make its supply chain more efficient.
In December 2018, Arla reached an agreement with Mondeléz International to acquire its processed cheese business in the Middle East.
The deal completed back in May with Arla now having taken over the operations.
The acquisition gives Arla full ownership of a state-of-the-art cheese production site in Bahrain, which currently has a capacity exceeding 66,000 tonnes.
This, it said, provides an opportunity 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.
The company will now 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 to Bahrain site.
“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,” said Head of Supply Chain in Arla, Executive Vice President Sami Naffakh.
“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.”
Arla said the move is likely to take place in late 2020 and mid-2021.