Dairygold Confirms €120 Million Investment to Increase Milk Production

Dairygold plans to invest €120 million to add another 18.5 million litres weekly capacity up to 2019. This will comprise of an upgrade of the existing dryer in Mitchelstown and the development of two 7.5 tonne/hour dryers in Mallow, one in 2015 and one in 2019 or earlier if required.

13 Jul 2012 --- Dairygold Co-op one of the country’s largest dairy processors has confirmed its post quota strategy for the Society In a guide sent this week to its 3,000 milk suppliers, the Society’s Chairman, Bertie O’Leary described the Board approved strategy as “the most efficient and cost-effective post quota strategy for the business and a good and sustainable solution for our Members.”

As a farmer owned co-operative the Society has committed to accept all the milk that its Members would produce post quota. Through comprehensive surveys Dairygold’s milk suppliers have themselves forecast of a 63.5% increase in milk production from 941 million litres in 2011 to 600 million litres a year extra by 2020. In order to facilitate that expected increase, the Society has agreed a carefully planned and phased investment of €120 million over the next eight years to incrementally expand its weekly processing capacity by 18.5 million litres by 2020.

Dairygold’s product strategy is firmly established in cheese and dairy ingredients and its expanded product profile will focus on these core products. The Society’s three existing processing sites at Mitchelstown, Mogeely and Mallow have capacity for varying degrees of expansion. Sweating these existing facilities makes absolute sense for Dairygold as they offer established infrastructure, which will reduce the capital cost of expansion.

The Society is already investing from its existing cash reserves to increase its weekly processing capacity by 4.3 million litres (15%) by 2014. This comprises expansion at its speciality cheese plant at Mogeely and its Cheddar plant at Mitchelstown, the latter is one of the largest in Britain and Ireland.

Once the expansion plans at Mitchelstown and Mogeely have been concluded Dairygold sees milk-drying on its Mallow site as offering the business the flexibility its expansion programme requires. It can be built up gradually in a modular fashion to allow for the production of a variety of products including Whole Milk Powder, Fat Filled Milk Powder and Infant Milk Formula Base. The Co-op’s Whey facility in Mitchelstown, one of the largest in Europe has planning approval for expansion. This has the added attraction of fitting into Dairygold’s ambitions for expansion in the supply of speciality dairy ingredients to the IMF sector.

Dairygold plans to invest €120 million to add another 18.5 million litres weekly capacity up to 2019. This will comprise of an upgrade of the existing dryer in Mitchelstown and the development of two 7.5 tonne/hour dryers in Mallow, one in 2015 and one in 2019 or earlier if required. The Co-op’s Mallow site is an excellent facility with a long tradition of milk powder production and the infrastructure already in place to reduce the capital cost of expansion. The Co-op will submit a planning application to Cork County Council within the coming month seeking approval for the planned re-development in the town.