AARHUS, DENMARK — Arla Foods, a global dairy cooperative based in Denmark and the seventh largest dairy company in the world, is considering the elimination of more than 350 jobs as the company takes the first steps in its three-year transformation program.
Launched earlier this year, the program, called Calcium, is expected to deliver €400 million in cost savings by the end of 2020 while creating significant efficiencies for the company. The Calcium program has two main objectives: To improve returns to its farmer-owners and maintain a competitive milk price, and to reinvest into business areas that fuel growth.
As part of the changes announced May 29, Arla has begun to streamline its corporate operations and support functions. The company said 195 positions are expected to be made redundant across certain functions, primarily at its headquarters in Aarhus.
"We must become one of the most agile and frontline-obsessed companies in today’s fast-paced and complex global food industry.” — Peder Tuborgh, Arla Foods
Arla also said it is taking steps to optimize its cheddar cheese production across its production and packing locations. To that end, the company said it is halting production at its Llandyrng creamery in Denbighshire, Wales, and moving cheddar cheese volumes to its Taw Valley (North Tawton, England) and Lockerbie (Scotland) creameries. Arla said it also plans to integrate all its cheddar cheese packing lines into its Oswestry, U.K., packing facility, which will result in the closing of its smaller Malpas and Lockerbie packing operations.
“We want to achieve the goal of building a stronger, more competitive Arla, which serves our customers and consumers better and provides higher returns to our farmer-owners and that requires us to make tough decisions,” said Peder Tuborgh, chief executive officer. “In order for Arla to continue to deliver on our Good Growth 2020 strategy that brings innovative dairy products to millions of consumers around the world, we must become one of the most agile and frontline-obsessed companies in today’s fast-paced and complex global food industry.”