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Arla Foods Procurement Expert to Deliver Insightful Talk at Singapore Dairy Summit

2019-07-31 14:07 Wednesday

Finding the right local supplier is a crucial task for any company involved in the dairy industry. This is especially so in the Asia-Pacific region, where the demands of cross-border trade call for low cost, quick response times and reliability from prospective business partners.

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Thankfully, for those looking to gain an insight into the strategically-important field of procurement, there will be a unique opportunity to hear from one of the industry's experts at the 6th Dairy Asia Pacific Summit 2019, organized by Duxes in Singapore from November 21-22.

During the summit, Bob den Hartog, Managing Director at Arla Foods Trading & Procurement Hong Kong, will share his invaluable insights on dairy procurement from low-cost countries. He will also outline his own approach to heading up Arla Foods' main Asia procurement office and discuss some of his experiences of working and living in the region over the past 17 years.

The presentation is sure to be of interest to anyone involved in the sector in the Asia-Pacific region, and will be helpful to all those who are looking for new opportunities and ways to improve their positions in Asia and Europe, especially in terms of facilitating business deals between East and West.

Introduction to Arla Foods Amba and our Asia Procurement office

Arla Foods amba is an international cooperative based in Viby, Denmark, and the largest producer of dairy products in Scandinavia and 4th largest in the world. It owns a wide portfolio of recognizable brands such as Apetina cheese and Lurpak butter and produces everything from smoothies, to specialty cheese and yogurts.

The slogan of the procurement department at Arla is that they source “everything besides milk!” The milk they use already comes from the company's network of 12,500 farmers. The “everything besides” includes ingredients, packaging, CAPEX equipment, professional services, logistics and more.

In fact, dairy companies such as Arla have to source a myriad of hundreds of ingredients and manufacturing materials that are essential for producing a full range of products that can adequately satisfy different consumer markets and demands.

Arla's office in central Hong Kong serves its main procurement needs in the Asia-Pacific region and on behalf of their European dairies. Arla also has sales locations in Bangladesh, mainland China (Beijing), Indonesia, Japan, Korea, Malaysia and the Philippines.

Outlining the key sourcing trends and approaches ongoing in Asia

Arla Foods takes a methodical approach to sourcing in Asia. According to the company, it follows a 6-step process which helps them to find the right balance between quality, service and price.

The first step in procurement involves initiating the process, to find and set the right team for the job, and lay down the desired outcome. Secondly, the company sends out Requests for Information to supplier candidates, which reveal the level of competency that can be expected.

Later stages include setting a strategy, to minimize the risk of untapped opportunities in the market; looking for new opportunities to improve its current business practices; evaluating supplier candidates' proposals as part of contract negotiations; and, finally, ensuring the contract is implemented and is followed as smoothly as possible.

Highlighting the opportunities and challenges from Asian sourcing

With Asia-Pacific now being one of the largest dairy markets in the world, thanks to growing demand for products such as liquid milk, cheese and yogurt from customers in countries such as China and Indonesia, there are huge opportunities available.

For example, China's 1961 milk consumption of 2 kilograms of milk per person is set to increase by 4,500% by 2050. And it's not just liquid milk drinks that are getting more popular; in the next five years, the cheese market is set to grow by a third.

As a major player in international dairy, one of the challenges faced by Arla involves finding and developing partners for the future to remain competitive globally. These can come from Europe but in the future more may also come from Asia-pacific.

Further challenges faced by Arla include complying with local laws and regulations, dealing with the transport and supply infrastructure, and ensuring that every one of their products conforms to strict health and safety controls.

Sharing our approach to identify and qualify suppliers in the region

In order to better meet such challenges, the company has publicly stated that: “Responsible sourcing is our approach to implementing Arla Foods' Code of Conduct in all our external supplier relations.”

This code of conduct includes such directives to, among other things, source agricultural products in a sustainable and responsible manner, and use internationally recognized certification schemes that contribute to the development of sustainable production.

Whenever they are looking to enter a new business agreement, Arla says it always expects suppliers to support them in complying with ethical, social and environmental requirements.

To further such goals, the company has stated publicly to ensure the safety of its products, no matter where they are manufactured, and make sure that all of its factories and manufacturing sites are certified according to internationally recognized food safety standards.

The key to producing a quality product is getting all of these processes, services and ingredients working together in synchronization. Finding skilled specialists who are as passionate about food as Arla is a complex job. Although the task may be difficult, the results can be hugely rewarding.

The vision as set forth by Arla is "Creating the future of dairy to bring health and inspiration to the world, naturally...", and this is a principle that Bob den Hartog follows in each aspect of his work, too.

If you would like to attend the talk by Bob den Hartog, and hear more from other dairy experts this November, click here to book your tickets for the 6th Dairy Asia Pacific Summit 2019 in Singapore: http://www.duxes-foodbeverage.com/dairy-ap/index.html.

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