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DMK signs contract to produce mozzarella cheese for Arla Foods

FBR Staff Writer Published 21 December 2017

German dairy company DMK Group has signed a contract to produce 35,000 tons of mozzarella cheese annually for Arla Foods.

The third-party manufacturing contract will see DMK rebuild its Nordhackstedt site in northern Germany to become fully focused on mozzarella production.

The German firm will invest €15m to focus the full capacity of the site for mozzarella cheese by late 2018 prior to initiating the third party manufacturing contract with Arla.

Arla, through the agreement, is looking to consolidate on its position as a leading producer of mozzarella cheese which it provides to consumers and foodservice customers across Europe, Asia, the US and the Middle East.

DMK Group CEO Ingo Müller said: “We are re-shaping our footprint for our German plants to produce in a more efficient way. Next to this, we are optimizing our portfolio towards more value-creating products.

“This contract manufacturing agreement will enable us, to make a next step forward and to weatherproof DMK for the future.”

After completion of the renovation at the Nordhackstedt site, DMK and Arla’s joint venture ArNoCo will see an increased supply of whey.

ArNoCo is engaged in the production of whey protein and lactose at a nearby site to the Nordhackstedt facility and also at Arla’s site Denmark Protein located in western Denmark.

Arla Foods CEO Peder Tuborgh said: “We are very pleased to sign this important manufacturing agreement that secures access to profitable raw material for our joint venture production at ArNoCo.

“It will also expand Arla’s strategic mozzarella business and our own production of whey protein ingredients as we continue to add even more value to our farmer-owners’ milk.”

Currently, DMK’s cheese factory in Nordhackstedt has a production capacity of around 70,000 tons, of which half is used for mozzarella cheese.

The partnership between Arla and DMK will see the Danish firm supply the latter with 300-350 million kilos of milk for the production each year. In turn, DMK will produce the committed quantity of mozzarella cheese annually.

Image: ?DMK Group and Arla Foods have inked a mozzarella contract manufacturing agreement. Photo: courtesy of Arla Foods amba.