Lakeland centralises butter production and starts independent milk tests
The decisions follow Lakeland’s purchase of the former Golden Vale owned Bailieboro co-op in Co Cavan from the Kerry Group last March and a Nestle milk processing plant in Omagh, Co Tyrone, in April.
It will become the only dairy processor on the island of Ireland to have its entire milk pool independently tested.
Lakeland, which serves the largest geographic milk pool on the island, expects to achieve savings of 1 million in a year as a result of the moves.
The co-op’s milk pool stretches from Offaly to Tyrone and from the Shannon to the east coast, with 450 million litres (100 m gal) in the Republic and 270 million litres (60 m gal) in Northern Ireland. It employs over 450 people and has a projected full-year turnover of 380 million.
Lakeland chief executive Ed Prendergast said one of the benefits of the Lakeland-Bailieboro merger has been the opportunity offered to consolidate operations like butter production into one location to be in a position to produce it in the most efficient and cost-effective manner possible. Both Lakeland and Bailieboro had similar sized butter production facilities.
Following a detailed review it was determined that the co-op’s total butter output of about 26,000 tonnes per annum can be produced most efficiently in the existing Bailieboro butter facility and at the least cost.
“The Bailieboro facility will comfortably handle Lakeland’s total butter production with the existing staffing levels and within the normal shift working arrangements.
“The move is in the best interests of Lakeland Dairies and is essential if we are to remain competitive in the market,” he said.
Mr Prendergast said that while the closure of the butter plant in Killeshandra, Co Cavan, is regrettably unavoidable on commercial grounds, the site will still employ over 130 staff in head office, ultra-heat treatment (UHT), casein and related operations.
A new green field 10 million world class UHT facility is already in production. The purpose-built facility at Killeshandra will position Lakeland as the largest such processor in Ireland or Britain.
It has a processing capacity of some 12,000 tonnes of ice cream and custard annually and some one billion mini-pots of milk and cream for the hospitality sector, representing about 30% of the British market for these products.
Mr Prendergast said the decision to move to independent milk-testing follows a period of review and consideration that takes account of the fact that the former Bailieboro suppliers held a very positive view of their experience with it.
“We have quietly consulted with farmers throughout Lakeland’s 15 county catchment area and listened to feedback over the past few months.
“Since it was clear that independent milk testing was highly thought of and made good sense for the co-op, we have decided to implement it,” he said.
Mr Prendergast said this was a positive development from both Lakeland’s point of view and that of its suppliers.
The move to centralise butter production and independent milk testing will involve a reduction in staff numbers of about 20, and it is anticipated that this can be achieved through voluntary redundancy. “We are at present discussing this situation with our staff and their representatives and we are confident that arrangements will be finalised in the near future,” he said.
