Dairy Crest is investing GBP75m (US$100.3m) to boost cheese production at a creamery in Cornwall in the south-west of the UK as it seeks to meet increasing demand in its domestic market and overseas.
The investment at the Davidstow plant is part of GBP85m the London-listed firm is ploughing into its business to increase growth in cheese brands Cathedral City and Davidstow, as well as enhance whey production capacity.
In a statement today (23 May), Dairy Crest said the cash injection bill bolster annual cheese output from 54,000 tonnes to 77,000 tonnes over the next four to five years, and add 200m litres of milk capacity. Whey production at the Davidstow site, which is mainly used to make infant formula for the global market, “will grow proportionally”.
With the new investment, Dairy Crest said it is responding to the “growing cheese market in the UK, including convenience and snacking products, and on growing demand internationally in Europe, China, the US and the Far East”.
Headquartered in Surrey, the company also says the funds will help support local farmers and economic growth in the south-west region. Dairy Crest added it has also invested in its “farm business team”, which liaises directly with the 330 farmers in Devon and Cornwall who supply the company.
Also, in consultation with the firm’s independent dairy producer Dairy Crest Direct, the company has introduced a new milk-pricing schedule that will be simpler to manage and will “reward those farmers who supply milk with the most suitable composition for the manufacture of the company’s cheeses and de-mineralised whey”.
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As well as its cheese brands, Dairy Crest manufactures butters, oils and spreads such as Clover, Country Life and VitaLite.
Chief executive Mark Allen said: ”Dairy Crest is proud of the role it plays in the economy of the south west, and this GBP85m investment is a vote of confidence in the Cathedral City brand, our employees and our farmers. The partnership we have with our farmers is absolutely crucial to our business and this investment should give them the confidence to invest in their own businesses, increase their productivity and enhance their important role in protecting the rural environment.”
Also today, Dairy Crest reported its preliminary annual earnings for the year to 31 March. Revenue climbed 10% to GBP456.8m, with Cathedral City incomes up 6% and spreads 10%.
Adjusted profit before tax was up 3% at GBP62.3m, while reported profit before tax, but after exceptional items, surged 345% to GBP179.2m.