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Welsh dairy to boost capacity with £14.4m investment
A North Wales farmer-owned creamery has announced a three-year £14.4m expansion to increase cheese production by 50 per cent and create 30 new jobs by 2024.
The investment by South Caernarfon Creameries (SCC) is backed by the Welsh government with a £5m grant from its Food Business Investment Scheme.
The dairy co-operative plans to increase production from its current level of 15,000 tons of cheese a year to 23,000 tons with an increase in staff from 130 to 160 over the next three years. This growth is projected to increase its demand for welsh milk for its plant at Chwilog, near Pwllheli, from 130 million litres to more than 200 million litres a year, as turnover increases from its current level of £60m a year to over £85m.
The £14.4m project will include new facilities for milk reception, additional cheese production and packing lines and a new whey processing facility. Investment is also planned for effluent treatment and improving its environmental and energy performance. The works are scheduled over a three-year period to be completed by 2024.
SCC managing director, Alan Wyn-Jones, said: “Following our first phase of investment back in 2016, we’re pleased to announce the next phase of our business growth strategy which will make us even more resilient, efficient and sustainable in what is a ferociously competitive industry.
“We have grown strongly in recent years with our sales doubling in the last five years from £30m to £60m and have reached the current production capacity of the plant after major investment in our core cheese production and packing facilities back in 2016. We are not interested in growing for growing’s sake. Our plan is all about making us even more competitive and profitable and so more resilient and sustainable for the future.
“As a dairy farmer cooperative that directly leads to more competitive and stable returns for our farmer members from across North and Mid Wales, thus enhancing the competitiveness of the Welsh dairy sector and farm viability.”
SCC, set up over 80 years ago, has remained on the same site near Pwllheli, and is Wales’s only farmer-owned dairy co-operative with 134 members. The latest investment follows on from £11.5m spent in 2016 on a new state-of-the-art production and packing plant where its cheese is matured, cut and packaged for UK and international markets, as well as village and corner shops across Wales.
Mr Jones added: “SCC is unique within Wales and the UK in being vertically integrated so that our supply chain is owned by the business, our members, and it takes advantage of that co-operative model. That means we have the flexibility to offer a diverse range of cheeses on a large or small scale batch basis, and provenance because we know exactly where our milk comes from as we’re the only 100% Welsh farmer-owned business.
“The project aims to deliver balanced investment across the business to allow us to grow our vertically integrated model and maintain our USP; lowering unit cost, maintaining flexible production and provenance thus contributing to a higher level of added value margin being retained in Wales.”
SCC has an ambitious sales growth target of over 50% by 2024 and Mr Jones concluded: “Our growth in recent years demonstrates that our business model works’ and we thank our customers for their ongoing support. As we continue to grow our focus will remain on developing business with our existing customer base as well as growing new added-value markets.
“To do this it is important that both our cheese production and packing capacity is increased but also that the supporting infrastructure is upgraded or renewed which is what the next phase is all about.”
South Caernarfon Creameries was founded in 1938 with an initial 63 producer-members and has now grown to be Wales’s premier dairy company supplying its cheese and butter to the UK’s major supermarkets, as well as to international markets.