Arla Food Case Study

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The Swedish-Danish Company and milk producer Arla Foods has decided to broaden their distribution outside of Europe and have created two joint-ventures in West Africa, one in Senegal and one in Nigeria.
Arla Foods is an international dairy company with farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxemburg and the Netherlands. The company dates back to 1881 when Swedish and Danish farmers went together to create a cooperative and jointly invest in plants to produce dairy. Today they are producing in a lot of countries and already have an active role producing in West Africa, but mostly through various distribution agreements. They are now going from a license based business model to implementing foreign direct investments, by creating …show more content…

Arla Foods is therefore planning to start with powder milk and liquid milk, which is strongly demanded in the big cities, and from there on diversify the products to yogurt, butter etc. (Arla, 2015). Arla states in a press release that “We are here to build a long-term business, and that requires strong local partners.” (Steen Hadsbjerg, head of Arla’s business region in Sub Saharan Africa, 2015).
Joint venture with Tolaram Group
Arla Foods is already producing in Nigeria today under the brand Arla Dano. Nigeria is one of the biggest markets in Africa for dairy products and Arla Foods is hoping that by succeeding in Nigeria thereby creating a platform to spread to other countries (Arla, 2015).
The joint venture is going under the name TG Arla Dairy Products and is a 50/50 partnership with the Nigerian company Tolaram Group, a well-known company that is the producer of noodle products and food oils. Tolaram Group will handle the packaging, marketing, sales and distribution of the Arla products in Nigeria, as they have a profound understanding of the Nigerian consumer-goods

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