Nigeria: Arla to expand through joint venture

Arla has announced plans to expand in Africa through new joint ventures in Nigeria and Senegal.

In Nigeria, it will be partnering with Tolaram to provide the distribution backbone that will help Arla grow and develop its business in West Africa, the company said, adding that the move was part of Arla’s strategy to develop new markets outside the EU.

The two new joint ventures are described by Arla as being another step towards fulfilling the company's ambitions in sub-Saharan Africa, where it aims to grow its annual revenue from approximately €90 million ($102 million) to around €460 million ($519 million) in 2020. This is to be achieved initially through sales of powdered milk and liquid milk, and eventually also butter and cheese, the company said.

In Nigeria Arla already has an established business with annual revenue of around €80 million ($90 million), but so far this has been based on various distribution agreements. Now, by placing all its current and future business in the new joint venture company with Tolaram Group, Arla said it expected to grow its revenue to €240 million ($271 million) by 2020.

“Nigeria is one of the biggest markets for dairy products in Africa", said Steen Hadsbjerg, head of Arla’s business region in Sub Saharan 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”.

Source: Arla