GERMANY > Denmark based Arla Foods and Germany based dairy company DMK Group enter into agreement to rebuild DMK’s Nordhackstedt site

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Arla Foods and DMK Group, who have already entered into a joint venture ARNoCo, have signed a third party manufacturing contract in which DMK will produce 35,000 tons of mozzarella cheese for Arla in its Nordhackstedt site in northern Germany. The Nordhackstedt site will be fully focused in mozzarella production and DMK will invest 15 million euro ($17.78 million) to rebuild its Nordhackstedt site which has approximate capacity of 70,000 tons by late 2018.

Arla will supply 300-350 million kilos of milk for the production annually and will pay DMK to produce 35,000 tons of mozzarella cheese each year.

According to Arla Foods (“Arla”) and German dairy company DMK Group (“DMK”) have signed a third-party manufacturing contract, which will see DMK produce 35,000 tons of mozzarella cheese for Arla, per year at its Nordhackstedt site in northern Germany.

As part of the agreement, DMK will rebuild its Nordhackstedt site to become fully focused on mozzarella production. This will increase the supply of whey for the two companies’ joint venture ArNoCo, which produces whey protein and lactose at a neighboring site and at Arla’s site Denmark Protein in western Denmark.

Arla will supply 300-350 million kilos of milk for the production annually and will pay DMK to produce 35,000 tons of mozzarella cheese each year.

According to says Peder Tuborgh, CEO of Arla Foods:

“We are very pleased to sign this important manufacturing agreement that secures access to profitable raw material for our joint venture production at ArNoCo. It will also expand Arla’s strategic mozzarella business and our own production of whey protein ingredients as we continue to add even more value to our farmer-owners’ milk.”

“Arla is one of the world’s leading producers of mozzarella cheese, and with this agreement we aim to build on that position to continue to provide consumers and foodservice customers with quality mozzarella in Europe, Asia, USA and the Middle East.”

Ingo Müller, CEO of DMK Group, commented the following regarding the new contract:

“We are re-shaping our footprint for our German plants to produce in a more efficient way. Next to this, we are optimizing our portfolio towards more value-creating products. This contract manufacturing agreement will enable us, to make a next step forward and to weatherproof DMK for the future.”

As the global mozzarella market is growing and is expected to increase from 600000 tons in 2017 to 720000 tons by 2022, the mozzarella production increase at Nordhackstedt will surely benefit both DMK and Arla Foods. Both these companies had collected set up a joint venture ArNoCo in 2011 at the Nordhackstedt site and since 2015 a state-of-the-art whey processing facility has been up and running Global Mozzarella market is growing

About the DMK GROUP

DMK is Germany’s largest dairy cooperative with around 7000 employees that proceeds milk at 16 sites throughout Germany and two other sites in the Netherlands. Additionally six sites manufacture baby food, ice cream, and health products. DMK has turnover of 5.1 billion euros ($60.5 billion) and is a key player in the European dairy industry. Some of its brands include MILRAM, Osterland Oldenburger, Rose, Dutch Original Cheese, Humana, Casarelli, Intact, Sanotact, Hansal and NORMI.

About Arla Foods

Arla Foods is headquartered in Denmark and manufactures dairy products. It specially produces and supplies specialty cheese such as blue and feta cheese, pre-flavored loaves, cream cheese, whipped cream cheese, garlic and herbs and organic cream cheese products. Arla Foods operates worldwide and also produces milk, yogurt, butter, spreads, and powdered milk and food ingredients.