Arla Foods inaugurates state-of-the-art 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 ($55 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 inauguration ceremony was held under the patronage of His Royal Highness Prince Salman bin Hamad Al Khalifa, Deputy Supreme Commander and First Deputy Prime Minister and was attended by His Excellency Zayed R. Al Zayani, Minister of Industry, Commerce and Tourism, Arla’s CEO Peder Tuborgh, Executive Vice President of International Tim Ørting Jørgensen, Executive Vice President of Supply Chain Sami Naffakh and employees.
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 both Puck, Arla, Dano, Kraft and Private Label brands while creating over 100 jobs new jobs in the process.
Arla Foods S.P.C today produces approximately 16,000 tons per year and includes an on-site innovation pilot plant. Built in 2008, it has won multiple awards for manufacturing excellence within core cheese categories.
By moving the production of processed cheese and sterilized cream to this site, Arla expects to improve the shelf-life of these 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.
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.”
Mr. Khalid Humaidan, chief executive - Bahrain EDB added: “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.”
Speaking at the event 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,” he added.
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 EUR 560 million.