Arla Foods will invest more than $60 million to expand its dairy manufacturing site in Bahrain, increasing production capacity by 30% as the cooperative doubles down on the Middle East as a growth and export base.

The expansion will add 8,000 square metres to Arla’s facility in the Bahrain International Investment Park, its largest production site outside Europe. It will make the Danish-owned group one of the region's biggest dairy manufacturers by output.

The investment is aimed primarily at scaling production of Arla’s Puck branded spreadable cheese, a core product across the Gulf and wider Middle East and North Africa (MENA) markets.

The additional capacity will also enable the company to export to new markets beyond its current footprint of more than 20 countries.

Arla has steadily increased its manufacturing presence in the region as dairy demand in the Middle East continues to outpace that of more mature European markets, driven by population growth, urbanisation and rising consumption of value-added dairy products.

“By expanding our Bahrain facility, Arla is strengthening its regional leadership, increasing production capacity, and advancing sustainable growth,” said Kim Villadsen, senior vice president for Arla Foods MENA, adding that the company sees Bahrain as a long-term manufacturing hub for the region.

The Bahrain site, which Arla acquired in 2019, plays a central role in supplying Gulf Cooperation Council (GCC) markets and parts of Asia and Africa.

Bahrain’s strategic location and trade links have made it an increasingly attractive base for food manufacturers looking to serve multiple export markets from a single production site.

Government officials said the expansion aligns with Bahrain’s industrial strategy, which aims to attract higher-value manufacturing investment and position the kingdom as a regional food production hub. The project will incorporate automation and energy-efficient technologies, according to the Ministry of Industry and Commerce.

More than half of the workforce at the Bahrain facility is now made up of Bahraini nationals, Arla said, reflecting efforts to localise skilled roles as production scales up.

The investment follows Arla’s receipt of Bahrain’s 'Golden License,' a scheme designed to fast-track services and incentives for companies making large-scale, job-creating investments in the kingdom.