Arla establishes Egyptian JV

25 May 2015

Arla Foods and the Egypt-based dairy company Juhayna have agreed to form a joint venture which will sell Arla’s products across Egypt. Juhayna Food Industries is said to be Egypt’s leading manufacturer of UHT milk, yoghurt and juice. However, the company has a very limited production of butter, cheese and cream, which Arla has specialised […]

Arla establishes Egyptian JV

word-cloud-joint-venture-related-items-33692344Arla Foods and the Egypt-based dairy company Juhayna have agreed to form a joint venture which will sell Arla’s products across Egypt.

Juhayna Food Industries is said to be Egypt’s leading manufacturer of UHT milk, yoghurt and juice. However, the company has a very limited production of butter, cheese and cream, which Arla has specialised in across the Middle East and Africa. Therefore the two companies will now form a joint venture company that will sell Arla’s products in Egypt.

“It is a very good match for both parties,” said Arla’s senior vice president of the Middle East & Africa, Rasmus Malmbak Kjeldsen.. “Juhayna has a nationwide distribution network, and we are not competing within the same product categories. Together we now get a broader product portfolio, which strengthens the business of both parties,”

Juhayna owns 51% of the new joint venture company, while Arla owns 49%. However, Arla will be in charge of the daily management of the joint venture. The ambition, says Arla, is for the company to also start up local production in Egypt.

“We have built our entire business in the Middle East through cooperation with local partners. In Arla we excel at making joint ventures succeed, and that is a business model we will use to establish ourselves in other African markets as well,” said Kjeldsen.

He estimates that the new joint ventures company will have 40-50 employees, and predicts that the work force will exceed 100 employees within the next year or two.

The new company, to be named ArJu Food Industries, will target an October 2015 start of sales operations. With the new joint venture company in place, Arla said it expects its revenue in Egypt to exceed €90 million in 2020.