Dairygold sells cheese plant

DAIRYGOLD, now in the process of a major restructuring programme, has confirmed the sale completion of its 50% stake in the Aeron Valley cheese manufacturing plant in Wales.

The sale to British cheese manufacturer McLelland does not include an adjoining state-of-the-art packing facility which Dairygold has retained.

It said the move in relation to the Aeron Valley plant puts it on a stronger footing to expand British consumer foods sales.

The adjoining pre-packed operation Dairygold Food Products (UK) Ltd (DFP) is one of the most modern and efficient cheese packing plants of its kind in Britain and Ireland with a packing capacity of 1,000 tonnes per week.

Over the last year, DFP has expanded its business with a number of private packing and own-label arrangements.

This growth is expected to continue during 2004.

The sale brings to a close an extremely busy nine months for the co-op, whose new chief executive Jerry Henchy took up duty last March.

Dairygold announced before Christmas that it had achieved a total of 500 redundancies at a once-off rationalisation charge of €40 million.

It has also outsourced its transport operations.

Milk collection, bulk feed and fertiliser delivery and general haulage will be operated by a number of licensed transport hauliers from Thursday.

And, in a new departure from tradition, Mr Henchy has also made it clear that future salary will be "performance related" for anyone carrying the title of manager in the new Dairygold.

Dairygold has also sold its unprofitable beef processing plants at Kilbeggen and Charleville while negotiations on the sale and lease of the co-op's five pig farms are still "in progress".

Over the same period it undertook major product development and re-branding exercises in its consumer foods division.

Decisions on the future of Dairygold's four milk processing sites and on streamlining its product portfolio are expected in 2004.

This will be preceded in February with an extensive rules change consultation programme with members so that a proposed new rule book for the society can be put to shareholders for approval at a special general meeting in the spring.