By Louise Rasmussen COPENHAGEN, Feb 25 (Reuters) - Danish dairy group Arla will invest 300 million euros ($354 million) through 2030 to increase cheese capacity at a Swedish factory after local milk
Arla commits $354 million to expand Swedish cheese output by 2030
By Louise Rasmussen
Investment and Strategic Rationale
COPENHAGEN, Feb 25 (Reuters) - Danish dairy group Arla will invest 300 million euros ($354 million) through 2030 to increase cheese capacity at a Swedish factory after local milk supply improved and the government stepped up efforts to boost food security, it said on Wednesday.
Returning hushallsost production to Sweden
The maker of Lurpak butter and other dairy products said it would expand its Gotene site to bring production of the popular Swedish cheese hushallsost back from Denmark.
Policy focus and CEO commentary
CEO Peder Tuborgh told Reuters Arla began planning the investment in 2024, as Sweden signalled a sharper policy focus on food resilience.
"It's a very big investment, which is based on our belief that our farmers in Sweden will keep on growing their production as they have done the last several years," Tuborgh said in an interview.
He said Swedish consumers were also showing a strong preference for domestic products.
Cheese self-sufficiency boost
The investment will raise Sweden's self-sufficiency in cheese by around 10 percentage points to 47%, Arla said.
Tuborgh said Arla - a cooperative owned by farmers in seven European countries - moved some hushallsost production to Denmark about 15 years ago because of limited Swedish milk supply.
"Now it's time to move the cheese back home again, so to speak ... because now we can see that the milk and the raw material are available," he said.
Götene site capacity expansion
Milk processing capacity at the Gotene site, which produces butter, cheese and milk powder, will roughly double to 1 million metric tons, Arla said.
It is Arla's largest-ever investment in a single factory.
Norre Vium capacity reallocation
Capacity freed up at the Norre Vium factory in Denmark, which currently makes hushallsost, will be used for other products, aimed mainly at European markets, Tuborgh said.
Exchange rate used ($1 = 0.8472 euros)
($1 = 0.8472 euros)
(Reporting by Louise Rasmussen. Editing by Anna Ringstrom and Mark Potter)
