Arla Foods expands its business in Saudi Arabia

Arla Foods, the leading global dairy company responsible for brands such as, Puck®, Lurpak®, The Three Cows®, Starbucks® ready to drink, and Kraft® in Saudi Arabia has announced that within the last 5 years, it has invested a total of SAR 127 million in the Saudi dairy business, reaffirming its commitment to supporting the growth of the industry in the Kingdom, and supporting Saudi Vision 2030 to diversify the economy.

Arla Foods is investing over SAR 64 million in its brand-new production lines which have been operational in Saudi Arabia since September 2021. These lines will be producing Starbucks® ready to drink products and Puck® Sauces, Soups, and cooking cream. The production volume in Saudi is projected to increase by 10% in 2022 compared to 2021. With these additional production lines, Arla Foods is set to further increase the diversity of the products it has been exporting to the region.

Arla Food’s efforts have created several new jobs in the Kingdom over the past year and the company plans to continue offering new employment opportunities in Saudi Arabia, especially among senior level jobs. The company has been successful to achieve the Kingdom’s Saudization targets through a substantial increase in the number of local hires. With the new production lines, Arla Foods is introducing a fully Saudi Female operated line.

To further attract young talent, build their experience and apply their skills in the workforce, Arla Foods has an ongoing relationship with educational institutions such as King Saud University, Dairy & Food Polytechnic (DFP) and Human Resources Development Fund (HRDF).

Growing local dairy market

The Saudi dairy market valued at $5.72 billion in 2020, is estimated to reach $7.94 billion by the end of 2026, growing with a CAGR of 5.66%, according to TechSci Research report.

 “Saudi Arabia is one of the leading markets for dairy products in the region and has become a focal point for our production expansion goals. Serving as a gateway for us to tap into the country and neighboring markets, Arla Foods is aligning its operations with the Kingdom’s long-term goals for the sector to support the Saudi economy and seize the opportunities presented by the ever-growing market,” said Henrik LilballeHansen, Vice President, Managing Director of Arla Foods, KSA

New and improved production lines

Arla Foods introduced two production lines in September 2021 for Starbucks® ready to drink products and Puck® Sauces, Soups, and Cooking Cream. This has enhanced efficiency by reducing transit times, increasing the average shelf life of dairy products, and making it more easily accessible to customers in the farthest regions of Saudi Arabia. The addition of the new lines is also helping the growth of these categories in the region.

Arla Foods is always keen to expand on its footprint locally. In its last meeting with the Ministry of Investment, Henrik LilballeHansen, Vice President, Managing Director of Arla Foods, KSA, expressed Arla’s history in the country and its ambitions to continue investing in Arla Foods KSA.

 “The Ministry of investment is always committed to extend its support to domestic and foreign investors to establish and expand their investments in the Kingdom. We expand our comprehensive and dynamic network of investors and match them with the best selection of investment opportunities in Saudi Arabia for various sectors. The Ministry is ready to provide support whenever needed and act as an advocate for companies to facilitate their investment journey. It is encouraging to see Arla Foods Company, as one of the most popular dairy companies, take the initiative with the introduction of new production lines and show their interest further to expand their presence in Saudi Arabia.” said Mr. Adnan Al-Sharqi – Deputy of Integrated Investors Services of Ministry of Investment.

Located in Riyadh, Arla has upgraded its production site, fully renovating them to accommodate the new production lines and transforming seven out of 13 warehouse depots so far.

 “Our long-term plan is to continue to scale up our business in Saudi Arabia. This further supports the Saudi Vision 2030 agenda to diversify the economy, focus on local agriculture, food security, while maintaining the high standards and growing demands of the expanding marketplace”, added Henrik Lilballe Hansen, Vice President, Managing Director of Arla Foods, KSA.