Canadian dairy cooperative Gay Lea Foods is to set up a dairy ingredients “hub” in the country.

Gay Lea is investing CAD140m (US$104m) over four years to establish an “innovative, nutrition and nutraceutical-grade dairy ingredients hub” in Ontario.

The first phase of the project, which is backed by the Dairy Farmers of Ontario, will start early next year with a CAD60m expansion plan in the village of Teeswater in Bruce County, Ontario.

The first phase includes a CAD3m investment to build a research and development centre of excellence in Hamilton, Ontario. “This working laboratory and innovation incubator will be the nexus between R&D and commercialisation throughout Gay Lea Foods’ operations and also service our partners in the dairy, food and health sectors,” the company said.

Upgrades and expansion at the cooperative’s Toronto-area food manufacturing facilities will also take place as part of the first phase “to increase our capabilities and competitiveness, improving cost efficiencies, while working to reduce our environmental footprint”, Gay Lea said.

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Michael Barrett, Gay Lea’s president and CEO, added: “Gay Lea Foods is motivated to shape the Canadian dairy industry of tomorrow while nourishing our farmer-owned cooperative today. Our cooperative is proving that successful and continuous growth as a wholly-owned and operating Canadian dairy and food processor is possible.”

Last month, Gay Lea Foods said it had entered into an agreement with Butterball Farms to acquire Stirling Creamery, a manufacturer of “artisanal crafted” natural and flavoured butter