Chinese strategy
OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.
Barely a fortnight after Australia’s largest dairy processor, co-op Murray Goulburn (MG), joined the platform, European co-operative Arla Foods has announced it will participate from April 3.
“We believe that the growth potential on the European markets will continue to be under pressure in the years to come, and we are therefore increasing our focus on the growing markets in the Middle East, Africa and Asia,” says Arla chief executive, Peder Tuborgh.
“A part of our strategy is to conduct an efficient trading business on those markets. The GlobalDairyTrade auction platform is one of the tools we intend to use to reach and service new and present customers in a cost effective way. We believe that customers will appreciate the opportunity to source Arla Foods products on the GDT auction platform.”
Arla says it will begin by offering medium and low heat Skim Milk Powder (SMP) products and then, over time, other products will be evaluated and added.
MG said it would offer lactose and see how that went before making a decision on other products.
General manager of GlobalDairyTrade, Paul Grave, welcomed Arla’s joining.
“We are delighted that Arla as a leading European and global dairy company has decided to participate in GlobalDairyTrade and play a part in shaping its future,” says Grave.
Arla has been a leader in helping to develop the market rules on the platform, he adds.
GlobalDairyTrade was established as a single-seller auction in July 2008, and sold whole milk powder once a month. Sales stepped up to twice monthly in 2010 and in October 2011, DairyAmerica, representing four major US producer-owned dairy co-operatives, became the first firm other than Fonterra to offer product.
Grave says the online auction is trusted by buyers as well as sellers to transparently and efficiently discover a fair and market-clearing price for a total of seven different categories of dairy food ingredients traded globally.
Arla’s involvement means three sellers on GDT will offer SMP, further deepening liquidity and price transparency for that product.
GlobalDairyTrade has now sold more than USD 5 billion-worth of product with annual volume this year hitting 700,000t. There are about 500 bidders registered from 80 countries around the world.
The auction is operated independently from Fonterra.
Arla Foods is owned by Danish, Swedish and German dairy farmers with production facilities in 13 countries and sales offices in a further 20, with a total of more than 16,200 employees.
Its brands include Arla, Lurpak and Castello. Its core markets are Denmark, Sweden, The UK, Finland, Germany and The Netherlands, but sales are made to over 100 nations.
It is the world’s largest producer of organic dairy products and through its Closer to Nature concept it is committed to making products free from artificial colouring and flavouring and with limited use of additives.
