Joint-venture factory producing whey, lactose

Aug. 12, 2014, Nordhackstedt, Germany – Production has begun at a new whey and lactose
facility that is a joint venture between Denmark’s Arla Foods Ingredients and
German dairy co-operative Deutsches Milchkontor.

Aug. 12, 2014, Germany – Production has begun at a new whey and lactose facility that is a joint venture between Denmark’s Arla Foods Ingredients and
German dairy co-operative Deutsches Milchkontor.

The factory, which cost more than €50 million to build, is
operated by ArNoCo, an organization created by the two companies specifically
to produce high-quality ingredients for the food and beverage industry. Located
in Nordhackstedt, Germany, 22 kilometres south of the Danish border, the new
facility is adjacent to an existing 60,000-tonnes/year cheese factory owned
by Deutsches Milchkontor (DMK). This site produces mozzarella and semi-hard cheeses such as Gouda.

ArNoCo will use the whey byproduct from DMK’s cheese-making
operations to produce whey protein concentrate ready to be converted into
value-added ingredients for the bakery, dairy and nutrition sectors.

The new site will also produce 25,000 tonnes of lactose
annually, which will be processed and sold as Arla Foods Ingredients’ Dry Blend lactose for infant formula.

"The market for these products is growing faster than the
ingredients industry can supply them, so the establishment of ArNoCo in
co-operation with DMK is a significant developmen,”said Hans Jørgen Lauridsen, ArNoCo’s project director, in a news release.

“The construction of the new
ArNoCo factory in Nordhackstedt is part of our quest to fulfill the pledges we
make under our ‘Quality starts here’ brand platform, which promises to offer
our customers security of supply backed by adequate capacity, logistics and
documentation, along with uniform high product quality, supported by strong
traceability,” said Lauridsen.

Following a test production phase in July, the ArNoCo
factory is now running at 80 per cent capacity and is on track to be at full capacity
in September, said the release.