Dairygold to sell off cheese firm stake
The co-op said it was negotiating with a Glasgow-based cheese manufacturer, A McLelland and Son Ltd, on the sale of the shareholding.
In 2001, Dairygold entered into a 50/50 joint venture with First Milk, Britain's leading farmer-owned dairy business, for the Aeron Valley Cheese plant.
At the time, it also took 100% ownership of an adjoining state-of-the-art packing plant.
The proposed deal with A McLelland an Son does not include the packing facility which Dairygold will retain.
This pre-packing operation Dairygold Food Products (UK) Ltd is one of the most modern and efficient plants of its kind in Britain and Ireland, with an average packing capacity of 1,000 tonnes per week.
Dairygold Food Products (UK) Ltd has in the past year increased its business with a number of private packing and own-label arrangements.
The intention is to expand the operation further in the coming year.
McLelland, the company behind Britain's second biggest brand, Seriously Strong Cheddar, is now finalising the deal to purchase Dairygold's 50% shareholding in the Aeron Valley cheese manufacturing plant and a further 30% from First Milk.
First Milk will retain a 20% shareholding, with McLelland assuming management responsibility for the facility, which has a production capacity of 10,000 tonnes of cheese per annum.
John O'Sullivan, director of Dairygold UK, said the proposed agreement represents a good deal for both Dairygold and Aeron Valley. McLelland will use it as a platform to grow their British business.
Subject to contract signing, all technical and operational staff will remain with Aeron Valley, while all sales and administration staff will transfer to Dairygold.
"For Dairygold UK, we can now concentrate on our core business of building our consumer foods and ingredients sales in the British market," he said.
