Welsh dairy co-op £14.4m investment will boost production and create jobs

South Caernarfon Creameries; Pictured is Alan Wyn-Jones, Managing Director at South Caernarfon Creameries. Picture Mandy Jones

A North Wales farmer-owned creamery has announced a three-year £14.4 million expansion to increase cheese production by 50 per cent and create 30 new jobs by 2024.

The investment by South Caernarfon Creameries (SCC) is being backed by the Welsh Government with a £5 million grant from their 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 their plant at Chwilog, near Pwllheli, from its current level of 130 million to more than 200 million litres a year as turnover ramps up from its current level of £60 million a year to over £85 million.

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 £11.5 million spent in 2016 on a new state-of-the-art production and packing plant where their range of cheeses is matured, cut and packaged for the UK and the international market as well as village and corner shops across Wales.

The £14.4 million 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.

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 added: “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.

“2020 has been a year like no other for everybody and it remains a worrying time due to Covid with the health and wellbeing of loved ones rightly being everybody’s priority right now.

“Thankfully there is some light at the end of the tunnel with the rollout of the vaccines over the coming months.

“Another positive is that our future trading arrangements with the EU is finally clarified therefore we can move forward with our planned investment which will underpin our projected growth in the coming years.

“Our business plan is all about continuing to add value to our members milk and ensuring that our business is sustainable for the longer term.”

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.

Last year its products, led by its popular Dragon Cheese brand, won over 80 awards, including 20 golds, at some of the UK’s most prestigious food and agricultural shows and represented Wales at the Salon du Fromage in Paris.

For more information on South Caernarfon Creameries go to https://sccwales.co.uk/