The European dairy giant will invest £1.6m into its Oswestry factory to keep it at the forefront of the dairy industry.
Arla Foods is to invest almost £40m across its UK sites and its logistics operations this year.
The investment will mark a 51% rise on last year for the farmer-owned dairy company.
Arla’s UK managing director Tomas Pietrangeli said: “Last year I unveiled the most ambitious UK business strategy to date to make Arla a household brand by 2020 and grow its revenue by nearly a third.”
Taw Valley creamery in Devon will see £5m invested to increase capacity and another £5m will be spent at Stourton in Leeds.
Global operations
The UK figure is part of a £285m investment that Arla Foods plans to make globally this year in its production facilities in Denmark, the UK, Germany and Sweden, with more than half of the spend going into Danish operations.
Arla Foods, one of the EU’s largest dairy companies, plans to increase its investment in processing plants by €335m this year.
This represents an almost 50% increase in capital investment as it seeks to turn more of its farmers’ milk into higher value products such as mozzarella cheese.
Pedar Tuborgh, CEO, said: “With these investments we continue our relentless pursuit of the goals in our Strategy 2020 to move more milk from bulk into brands and improve the profitability for our farmer owners.”
Arla Co-op has its headquarters in Denmark but is owned by 12,500 farmers in Denmark, Sweden, Germany, Luxemburg, the UK, Belgium and the Netherlands. It expects milk supplies to increase following the recovery in prices after the oversupply in the first half of last year.
Growing market
In 2015, Arla launched a five-year strategy focusing on moving milk from a bulk commodity to producing branded foods and ingredients under its brands Arla, Castello and Lurpac.
Tuborgh said mozzarella as a topping for frozen pizzas was seen as a growing market, prompting Arla to invest €13m in its mozzarella plant in Denmark, which is one of the biggest in the world.