Arla Foods Ingredients (AFI) is on a great growth journey and is projected to outgrow available capacity at the two Danish sites, Danmark Protein and ARINCO. To unlock new opportunities for the ingredients business, Arla has decided to change the strategic role of ARINCO in Videbæk, Denmark, making investments that will transform it into a dedicated ingredients production site.
AFI, a subsidiary of Arla Foods, is serving the global food industry with premium ingredients used in early life nutrition, clinical nutrition, sports nutrition as well as other food and beverage products.
“We see a very bright future for ingredients and a world of opportunities. This new strategic direction will accelerate our ambitious growth plans for our ingredients production and enable Arla Foods Ingredients to further strengthen our position as a leading global player in the ingredients market,” says Luis Cubel, Group Vice President and Managing Director, Arla Foods Ingredients.
Currently, besides ingredients, ARINCO produces milk powder for AFI’s B2B sales of Early Life Nutrition (ELN) and Arla’s branded Early Life Nutrition business.
While it has been decided that the AFI B2B business of ELN will discontinue in about 19 months, Arla will continue to expand the branded ELN business.
New strategic partnership
Arla has entered a partnership with French cooperative and ELN producer, Sodiaal. Arla and Sodiaal will work closely together to accelerate the China ELN business of the two companies, and Sodiaal will produce all of Arla’s future needs for ELN products in China as well as other Arla markets.
Arla’s branded ELN business will benefit from Sodiaal’s strong production capabilities to continue the current positive momentum. Both companies are farmer owned, both have integrated supply chains, and the companies’ production technologies are very similar. The new strategic direction will create more capacity at ARINCO for Arla’s growing ingredients production. Regrettably, it will also have an impact on approx. 170 job positions at ARINCO and Arla Foods Ingredients Head Quarters in Aarhus.
Luis Cubel explains: “It goes without saying that this is a difficult situation and a tough day for our employees. The changes will not be fully implemented for another 19 months, and until then, we will do everything we can to retrain and find internal job opportunities for those affected. The employees are highly skilled, and it is our clear ambition to retain as many of them as possible in Arla. However, redundancies will be unavoidable.”
During the 19-months transition period, Arla will work closely with customers to meet their demands before discontinuing the ELN production at ARINCO by the end of Q1 2026.
