From March 1, Arla's Chinese retails sales through its partnership with Mengniu and its South East Asian interests will be managed from Business Unit Asia's office in Kuala Lumpur, Malaysia.
Arla offices in Japan, South Korea, Bangladesh, Indonesia, Myanmar, and the Philippines will also report back to the Malaysian office.
China - alongside Russia, the Middle East and Africa - is a strategic growth market for Arla.
In June 2012, it became an indirect shareholder in Mengniu - a deal that boosted its access to lucrative Chinese sales and distribution channels.
South East Asia has, meanwhile, been identified by Arla as a region that "could potentially become a new strategic growth market."
Arla, owned by around 13,500 dairy farmers across Europe, expects Asian revenue to exceed €1bn (US$1.16bn) in the next five years.
With momentum building in the region, Arla decided "it's time" to shift management of its Asian interests to the region.
“In close cooperation with our partner Mengniu, we have developed our market in China. We have gained important experience and insight, which will be levers to accelerate our expansion in Asia. We have strengthened our presence in several SEA countries and it’s time to move the senior management and main leadership functions to the region,” said Finn Hansen, head of Arla Foods' international business.
Jesper Colding, vice president of marketing at Mengniu, will lead Business Unit Asia as senior vice president from March 1.
"Asia holds so much potential," said Colding. "There is a growing affluence among people and they are becoming increasingly aware of the importance of good health and choice of nutrition."
"We will build in the great foundation that has been created to refine our approach to the market in order to accelerate delivery of the strategic ambition," he added.
Frede Juulsen, who currently heads up Arla's Business Unit China, will from March 1 assume responsibility for third-party manufacturing (TPM), global infant formula, and the supply chain for Arla's Consumer International segment.