Arla Foods and German dairy company DMK Group have signed a third-party manufacturing contract that will see DMK produce 35,000 tons of mozzarella cheese for Arla per year in Nordhackstedt, Germany.
As part of the agreement, DMK will rebuild its Nordhackstedt site to become fully focused on mozzarella production.
This will increase the supply of whey for the two companies’ joint venture ArNoCo, which produces whey protein and lactose at a neighboring site and at Arla’s site Denmark Protein in western Denmark.
DMK’s cheese site in Nordhackstedt has a current capacity of 70,000 tons, of which half is dedicated to mozzarella cheese.
DMK will invest €15 million (US$18 million) to focus the entire capacity on mozzarella cheese by late 2018, after which they will initiate third party manufacturing for Arla.
Arla will supply 300-350 million kilos of milk for the production annually and will pay DMK to produce 35,000 tons of mozzarella cheese each year.
The new collaboration comes as a result of an increased global demand for mozzarella cheese from both consumers and the foodservice industry.
Arla Foods expects the European mozzarella cheese market to increase from 600,000 tons in 2017 to 720,000 tons by 2022.
