Arla has floated two joint ventures in Nigeria and Senegal in Africa, as part of its strategy to extend its network outside the European Union.
The company has tied up with local partners - Tolaram in Nigeria and Attieh Group in Senegal - with a view to building the distribution support capable of facilitating growth and development of its operations in West Africa.
While the operations in the new joint venture firm with Tolaram Group in Nigeria is expected to help Arla grow its revenue to €240m by 2020, similar initiative with Attieh Group in Senegal is targeted to post annual revenue of €32m by the same time period.
The joint venture in Nigeria will have the name TG Arla Dairy Products LFTZ Entreprise and owned 50% by Arla Foods and 50% by Tolaram Group. The joint venture firm in Senegal is called Arla Senegal, owned 75% by Arla Foods and 25% by Attieh Group.
Arla's Sub Saharan Africa business region head Steen Hadsbjerg said: "West Africa faces a milk deficit, which gives Arla an opportunity to provide milk powder and other dairy products that meet the consumers' needs.
"Nigeria is one of the biggest markets for dairy products in Africa. For Arla to succeed in Africa we must succeed in Nigeria. The population is growing at a rate of two to three per cent per year, and people are young, ambitious and increasingly well educated. This makes Nigeria a perfect market for Arla's Africa strategy, and we expect the new joint venture to start up its sales in the market in September."
Arla bets big on the joint ventures towards growing its annual revenue from €90m to around €460m in 2020.
The company hopes to achieve its target through sales of powdered milk and liquid milk as well as butter and cheese eventually. Arla's powdered milk products in Africa are known to be sold under the Arla Dano brand.
