Danish giant Arla Foods, the world’s 5th largest dairy company, has agreed to form a joint-venture with the Egyptian dairy processor Juhayna. The new company will be called ArJu Food Industries and aims to begin sales in October 2015.

Juhayna is the leading manufacturer of UHT-milk, yoghurt and juice in Egypt but has limited production of butter, cheese and cream. Without competing within the same product categories, the new company will sell Arla cheese, butter and infant formula products with an aim to generate revenues in excess of €90m by 2020.

At present, Arla’s business in Egypt barely scrapes the surface of a country experiencing steady economic growth with a population of more than 80 million people.

The retail structure in Egypt is fragmented, characterised by a limited amount of supermarket chains and countless small one-man shops. As such, the joint venture will use Juhayna’s nationwide distribution network to bring Arla products to millions of new consumers.