Danish diary firm Arla Foods says that it has reached an agreement to purchase the American food and beverage firm Mondeléz International’s Middle East cheese business, which is currently licensed under the Kraft brand.
The acquisition also gives Arla full ownership of a cheese production site in Bahrain. The facility, which has a capacity exceeding 66,000 tones, will help Arla expand its capacity for the production of cheese.
The financial details of the deal, which is expected to close by the end of May 2019, was not disclosed.
Arla, which currently manufactures Puck cheese and Lurpak butter, has a strong outlook for the MENA market – the company’s largest market outside Europe. Since 2010, Arla says that it has almost doubled its sales organically.
The diary giant has so far produced most of its regional products in Europe. The latest deal will help in expanding its local production after it saw its capacity maximized for the production of processed cheese.
"As such, this deal is an excellent strategic fit for us as it enables us to both expand our branded presence in the cheese category and secure the local production capacity we have been looking for to continue to grow our business,” says Arla CEO Peder Tuborgh.
Investments in food and beverage within the MENA region have been on the rise, thanks to a fast-growing population that has helped sustain robust consumer demand. According to a World Bank report, MENA’s food market could exceed $1 trillion by 2030.