Müller Dairy UK has announced plans to invest £17m ($27.3m) in a new butter manufacturing plant at its existing Market Drayton site – marking its entry into the British butter market.
Once fully operational, the facility will have the capacity to process 90,000 tonnes of cream – Müller Wiseman Dairies' entire yearly output of cream. According to the firm, the Shropshire-based butter manufacturing plant will the largest of its kind in the UK once completed.
Ronald Kers, CEO of Müller Dairy UK and Ireland (the parent company of Müller Wiseman Dairies), revealed the firm’s intentions at the Semex UK conference in Glasgow, Scotland earlier this week.
According to the company, the investment is a “major step towards hedging against cream commodity volatility.”
In his presentation, Kers spoke about the company’s current failure to “capitalise” on butter export opportunities, and the difficulties it has faced as a result of the global lull in commodity cream prices.
Managing commodity market exposure
“I also spoke about the extent to which the Müller Wiseman business has suffered as a result of the collapse in the global commodity cream market – the business has no choice other than to sell surplus cream at commodity prices, whatever these market prices are,” said Kers’ presentation.
“Today I am pleased to confirm that we are taking steps to ensure that we have the means by which we can start to manage our exposure to this market.”
Kers revealed that Müller Dairy UK had taken the decision to invest “with the group’s support.”
“It will have the capacity to utilise Müller Wiseman’s entire annual output of cream, if that is what gives us the best returns in the market cycle,” said Kers.
“It is important to stress that this will not protect us completely from volatility in global markets. But it will give us options which we currently don’t have. That’s good news for us, and for the dairy farmers who supply us.”
Butter development “on track”
Kers added that the facility is “on track for commissioning and first production in autumn this year.”
DairyReporter.com approached Müller Dairy UK regarding its announcement. A spokesperson for the company insisted that there is nothing more to add at the moment.
The spokesperson did reveal, however, that around 100 jobs will created over the coming year at the Market Drayton site to cope with general business expansion, including 20 roles at the new butter plant.