Arla Foods is to invest US$20m on its milk powder venture in Argentina in a bid to boost production efficiency.
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The dairy giant’s plant in Argentina makes whey protein powder, which is sold on to dairy and bakery manufacturers in South America.
However, only 30% of the whey can be used to produce the powder; the rest is sold as liquid animal feed.
Henrik Andersen, the man in charge of whey protein at Arla Foods Ingredients, said the cash injection would mean all of the whey could be used to make “added value” ingredients.
“Until now it has been difficult to process whey permeat powder of a high quality due to its sensitivity to humidity,” Andersen said. “However, since we built the factory new technologies have been developed which can cope with the problem.”
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By GlobalDataArla will build a spray tower to keep the permeat dry. “Compared to our current whey protein powder, the whey permeat powder will be a standard product, but considerably more profitable than animal feed,” Andersen said.
Arla set up the milk powder venture with local dairy group SanCor in 2002.
“We’re currently seeing a fall in protein prices but our whey protein products are of such high quality that we should be able to maintain relatively high price levels,” Andersen added. “When we’re able to process the permeat, our competitiveness should be enhanced even more.”
The venture also has customers in the Middle East, the Far East and Oceania.
