Arla Foods unlikely to meet its target for the year
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- 07 March 2003
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Weakening trends put pressure on prices and foreign exchange rates as German sales decline.
This was the message from Arla Foods’ Managing Director Jens Bigum to a meeting of Arla Foods’ Board of Representatives in Stockholm Wednesday.
Although profits for the two domestic divisions, Denmark and Sweden, are largely in line with expectations, the Ingredients and Production Divisions have experienced significant falls. This means that profits from dairy operations are currently falling short of the budget.
”It’s too early to predict the outcome for the year as a whole, but it seems likely that we’ll not reach the budgeted target this year,” Jens Bigum said.
In the past three months, US dollar, sterling and Saudi riyals rates have all fallen. Currently the dollar is worth DKK 6.90 which, over 12 months, means a cut of DKK 300 million in export earnings. This corresponds to five øre per kg milk.
In addition, the economic crisis in Germany has put the brake on Europe’s economy and made consumers more reluctant when buying food products. Both butter and cheese are now achieving lower prices.
”Only a marked improvement in the economic situation within the new few months will change this,” Jens Bigum said.
Arla Foods is an international dairy company owned by 9,700 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands. Arla Foods is one of the leading players in the international dairy arena with well-known brands like Arla®, Lurpak®, Puck® and Castello®. Arla Foods is focused on providing good dairy nourishment from sustainable farming and operations and is also the world's largest manufacturer of organic dairy products.