Arla Foods is to shut a dairy factory in Denmark and transfer some of the production to another plant.
The company’s facility in Tistrup is set to close due to declining production volumes, with the co-op adding the plant is “old” and expensive to maintain.
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Arla said keeping up the factory would “require significant investments to meet future standards for safety, occupational health and quality”.
The decision means 25 jobs will be cut “as of the first [financial] quarter of 2026”.
Arla plans to move the “majority” of the site’s cheese production to its facility in Taulov, approximately 80km away.
The company said production will be relocated during 2025. The Tistrup site will close the year after.
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By GlobalData“The majority of the cheese currently produced at Tistrup Dairy will be matured at Taulov Dairy, which will also save on transport and reduce CO2 emissions,” said the Viby-headquartered business.
Arla said it “will make efforts to offer the affected colleagues work at other Arla locations”.
Last month, Arla confirmed it was in talks to acquire a factory Switzerland’s Hero Group plans to close in Sweden. The two companies are in discussions over Hero’s Semper facility in Götene in the south of the country.
Arla is also set to increase its production capacity at a Finnish dairy facility after acquiring the building in full.
The co-op, meanwhile, is looking for a buyer for a cheese-making facility in the UK. Arla has put its Melton Mowbray creamery, known locally as Tuxford and Tebbutt, up for sale.
Earlier this week, Arla said its brands were boosted by returning consumers in the second half of 2023 but it reported flat sales for the year as a whole.
Reporting its 2023 results on tuesday (20 February), the farmer-owned cooperative said consumer sentiment improved throughout the year and it expects that positive momentum to continue in 2024.
CEO Peder Tuborgh, speaking in a post-results press conference, said: “The second half of the year was different to the first. The consumer market is in much better balance and we have seen significant growth in our brands come back again.”
The Lurpak, Castello and Arla brands owner reported 2023 revenues of €13.7bn ($14.75bn), roughly the same level as its 2022 figure of €13.8bn.
Sales were flat in the first half of the year as cash-strapped consumers opted for discounted products.
However, Arla’s reported “strategic branded volume driven revenue” fell 6% in the first half but grew 4.1%. in the second six months of the year.
