Wales’ largest dairy co-operative sells 15,000 tons of cheese, making £3.4 million profit
Wales’ largest farmer-owned dairy co-operative has delivered a record year with operating profits of £3.4 million after selling 15,000 tons of cheese.
The 135 Welsh farmer-members, many of whom have been with South Caernarfon Creameries (SCC) since it was founded in 1938, received an end of year dividend totalling £806,000.
Managing Director Alan Wyn Jones said this was achieved despite Brexit’s “added costs and administration to exporting which is having a negative impact on returns”.
Now, after £61.5 million in sales last year, the co-operative has also started work on a major expansion at their headquarters at Chwilog, near Pwllheli, which will be completed by 2024.
It will increase capacity at the site to 23,000 tons and create an extra 30 jobs, taking the workforce to 160.
Alan Wyn Jones said: “Our main priority in the pandemic has been the health and well-being of our loyal staff as well as doing what we can to limit the impact of the virus on the business and its customers.
“But in a year like no other, we have delivered a resilient business performance while continuing to pay one of the best milk prices in Wales to our farmer-members.”
Mr Jones said that dairy markets had recovered quickly from the early months of the pandemic and a slowdown in non-retail sales had been more than made up for by an increase in supermarket sales across the UK.
This has followed on from a strong trend of growth by SCC with sales doubling in the last five years from £30 million to £60 million which meant the production capacity of the existing plant had been reached.
He added: “The site processed record volumes of milk in the last 12 months and this trend will continue as we carry on growing while maintaining our high-quality standards.
“We are well-used to operating in a volatile global marketplace, but no-one could have foreseen the challenges of the last year in which the Covid crisis struck.
“Also the new Brexit trading arrangements have added costs and administration to exporting which is having a negative impact on returns in the UK and making selling our products into the wider market more difficult and costly than it has been in the past.
“While the year ahead will remain challenging as we continue to manage the business alongside the pandemic conditions and seeing cost inflation now coming through from raw materials and key overheads, the positives are that global economies will continue to recover, the fundamentals of dairy look positive.
“Our focus remains on the delivery of our objectives and the opportunities ahead, which we are now well-placed to take advantage of to deliver long-term business performance and prosperity for our stakeholders.”
The current expansion, christened Project Dragon and supported by the Welsh Government with £5 million from its Food Business Investment Scheme, is aimed at increasing production capacity and improving its operational and environmental performance. The first phase of the project, a waste treatment plant, is nearing completion with work now starting on expanding their production capacity and installing a new whey plant.
This will see an increase in the amount of Welsh milk processed at the plant from the current level of 130 million litres to more than 200 million litres with turnover rising from £61 million last year to over £85 million over the next 3 years.
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.