Peder Tuborgh, CEO, Arla Foods, and Malu Dreyer, chief minister of Rhineland-Palatinate, yesterday unveiled the Danish dairy cooperative's €110m (US$125m) investment at its site in Pronsfeld, close to the German border with Belgium and Luxembourg.
The Pronsfeld facility, which employs more than 1,000 people, already boasted the capacity to process around 1.4bn litres of milk each year.
Now, thanks to the investment, an additional 450m litres can be processed at the site annually.
The €110m ploughed into Pronsfeld by Arla also financed the construction of a milk drying tower and a creamery.
It will, as a result, churn out an extra 40,000 tonnes of butter each year for consumers in Germany and other Central European markets, and an additional 42,000 tonnes of milk powder for "growth markets in Asia and Africa."
Post quota
Arla, which is owned by 13,500 dairy farmers across Germany, Denmark, Sweden, Belgium, the UK, Luxembourg, and the Netherlands, acquired the Pronsfeld plant in 2012 through its merger with Milch-Union Hocheifel (MUH).
Through the merger, which saw it welcome farmer owners from Germany, Belgium, and Luxembourg, Arla became Germany's third largest dairy.
In the 2013/14 season, which ended March 31 2014, Germany produced in excess of 30m tonnes of milk - more than any other European Union (EU) Member State.
Milk production in Germany is likely to increase further in coming years following the abolition of the EU milk quota system in April 2015.
Arla, like many other European dairy processors, anticipates higher demand for processing post-quota, and in recent years has invested heavily to boost its manufacturing capabilities.
It predicted in 2013 that following the abolition of quotas its dairy farmer owners will produce "at least" an extra 1bn litres of milk per year.
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