Arla Foods opens $204 million dairy plant to meet global demand for milk powder - food ingredients first

Arla Foods opens $204 million dairy plant to meet global demand for milk powder – food ingredients first

May 31, 2022 – Arla Foods has unveiled its “largest investment to date,” a 55-hectare production plant in Germany with the capacity to supply specialty, long-life dairy products to 70 countries. The €190 million investment in the facility is set to meet demand for sustainable and nutritious dairy products such as drinking milk, cream, mixed milk drinks, condensed milk, sour cream, milk powder, butter and spreads.

The mega facility is headquartered in Pronsfeld and will draw milk from farmers in Rhineland-Palatinate, North Rhine-Westphalia, Luxembourg and Belgium, including Wallonia and Flanders.

The primary function of the facility is to increase the production of milk powder. It supports the company’s expected 5-7% annual brand volume growth in international business, which is in line with its five-year strategy called Future26.

“We will strengthen and expand our business in international markets such as the Middle East, West Africa and Southeast Asia, where the demand for affordable, nutritious dairy products exceeds domestic production and supply,” said Peder Toburg, CEO of Arla Foods.

The focus of global exports will include China, Kuwait and the Maldives.

Long life milk powder production
The facility includes a production plant with a 51-meter-high drying tower that can process 685 million kilograms of milk annually. The final product will be about 90,000 metric tons of milk powder.

Long Shelf Milk Powder is particularly suitable for Arla Foods’ international markets, where milk powder is an integral part of the local diet, especially in fast-growing urban areas. The facility also manufactures B2B products for the food industry, which processes milk powder into chocolate or baked goods.The final product produced at Pronsfeld’s production facility will be approximately 90,000 metric tons of milk powder. (attributed to him: Arla)

Approximately 12 construction sites will be constructed on the entire site over the course of the project, facilitating the expansion of the milk collection area and milk tanks to the power supply and sewage treatment plant.

Present in more than 140 countries, Arla had annual sales at its international business unit of €2.1 billion (US$2.3 billion) last year.

In 2021, Arla Food Ingredients unveiled an innovation center to develop the company’s capabilities in dairy and whey ingredients.

Achieving greenhouse gas targets
Expansion into Pronsfeld Dairy will help Arla meet climate targets within its operations. The new technical setup for electricity, heat generation called Combined Heat and Power (CHP) and process cooling will reduce the carbon footprint and electricity consumption by about 1,800 megawatt-hours of electricity and about 1,200 metric tons of CO2 equivalent per year for the entire dairy compared to a conventional cooling solution.

“This is an important step in the evolution of our manufacturing footprint towards more efficient and decarbonized dairy production, building on our strengths here in Germany and leveraging the latest technology,” says David Boulanger, Executive Vice President and Head of Supply Chain at Arla.

Since there is currently no green energy alternative to the natural gas used in the new production facility, Arla will purchase green electricity certificates corresponding to CO2e emissions for both gas and electricity as a short-term solution. In addition, Arla is looking to replace 25% of the natural gas used in the new technical setup with hydrogen.

The company is one of the first farmer-owned dairy companies globally to have a 1.5-degree target for greenhouse gas (GHG) emissions reductions of 63% approved by the Scientific Target Initiative (SBTi) under the Paris Agreement.

By Inga de Jong

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