Welsh dairy co-op targets expansion with £14.4m investment

A farmer-owned cooperative creamery in North Wales has unveiled a three-year £14.4m expansion to grow its cheese production by 50% and create 30 new jobs by 2024.

The investment by South Caernarfon Creameries (SCC) is also backed by the Welsh Government with a £5m grant from the Food Business Investment Scheme.

“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,” said managing director Alan Wyn-Jones.

SCC will increase production from its current level of 15,000 tons of cheese a year to 23,000 tons, growing its demand for Welsh milk from its current level of 130 million to more than 200 million litres a year. Staff numbers will rise from 130 to 160 over the next three years, and the co-op’s turnover is estimated to jump to £85m.

The business, which is Wales’ only farmer-owned dairy cooperative, doubled its sales over the last five years from £30m to £60m after investing £11.5m in a new state-of-the-art production and packing plant. “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,” Alan said.

“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.”

The current investment will go towards 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 the dairy’s environmental and energy performance.

“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,” Alan explained.

“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.”

SCC, which makes the popular Dragon Cheese brand, aims to grow sales by 50% in 2024 by boosting its existing business and growing in new markets, and Alan said recent growth in sales has proved the success of the group’s business model.

“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.”