Arla sets up regional business unit in KL

Arla Foods is setting up a new regional business unit to lead the organisation into the next phase of its development in Asia.

The new Business Unit Asia regional office, integrating market operations in China and South-east Asia, will be based in Kuala Lumpur, Malaysia, from March 1. It will set the strategy for all of Arla’s retail and food service activities in Asia, and will oversee its retail sales in Southeast Asia as well as in China (through the partnership with Mengniu Dairy China).

The establishment of this new unit follows on the progress Arla made last year to strengthen its country management in Bangladesh, Indonesia, Myanmar and the Philippines, and these as well as the management in Japan and South Korea and distributor sales in South-east Asia will all report to the new regional office.

Said executive vice-president Finn Hansen, head of Arla Foods’ business group, Consumer International: “In close cooperation with our partner, Mengniu, we have developed our market in China. We have gained important experience and insight which will be levers to accelerate our expansion in Asia.

“We have strengthened our presence in several South-east Asian countries, and it’s time to move the senior management and main leadership functions to the region.”

Asia is vital to Arla’s ambitions to grow and increase earnings for its cooperative farmer-owners in Europe.

As the world’s fastest-growing economic region with a raw milk deficit and a total population of 2.3 billion, Asia offers great potential for dairy products, especially those in the family nutrition line.

Arla has long identified China as a strategic market and sees South-east Asia as a new growth region. Potential revenue from these markets could exceed €1 billion (US$1.1 billion) within the next five years.

Consumer needs in China and South-east Asia are fairly similar, and possible synergies in brand and product portfolio as well as in marketing and innovation can now be better harnessed through the regional office.