Issue 46

Arla Foods Ingredients to offer lactose in Global Dairy Trade auction

Arla Foods Ingredients is to sell lactose ingredients through the Global Dairy Trade (GDT) online auction platform for the first time as part of its bid to become the world’s leading lactose supplier.

More than 900,000 tonnes of dairy ingredients are traded each year on GDT, the majority in the form of milk powder. However, only limited volumes of lactose are currently sold through the platform. Arla Foods Ingredients intends to start selling lactose via GDT from 15 April 2015. 

Luis Cubel, Sales Director for Arla Foods Ingredients’ Permeate & Lactose Business, said:

“GDT attracts more than 650 qualified buyers from more than 90 countries, and yet at present they have very little access to lactose through the platform. We can fill this gap in the market by offering our high quality lactose through GDT, which will boost our efforts to become market leader in the global lactose ingredients sector.”

He continued: “Arla Foods, our parent company, already trades skimmed milk powder on GDT so we know how effective it can be in terms of reaching existing and new customers. Our move into lactose will enhance our position in the market.”

GDT is open for bidders twice a month via an online auction. Sellers announce the volume of product available and the starting price, and bidders submit bids on the volume they would like to buy at that price. If demand exceeds supply, the Trading Manager then increases the price for the next round. This continues round by round in an ascending price clock auction until all bidding has ceased.

Arla Foods Ingredients’ decision to offer lactose through GDT comes at a time when the company is in the process of significantly increasing its lactose volumes. The official opening of Arla Foods Ingredients’ new lactose factory in Jutland, Denmark, took place in November 2014. When fully operational it will take Arla Foods Ingredients’ total lactose output – including that produced through joint-ventures – to 115,000 tonnes during 2015.