The investment will boost the co-op’s cheddar cheese-making capacity by 12,000t to 37,000t a year, making it the largest dairy processing facility in Scotland.
Neil Kennedy, chief executive of Milk Link, told FoodManufacture.co.uk: “The investment will completely transform our cheese production facilities there. It covers a whole range of activities from how we handle the milk, post-pasteurisation, all the way to how the milk is then pressed and put into boxes for maturing and indeed the whole process of how we start the maturation.”
The £20M will be spent on new equipment including a rapid cool system to speed the cheese maturation process, a new block-former system for pressing cheese and a combined heat and power plant to increase energy efficiency, said Kennedy.
A much higher level of robotic operation, replacing some of the traditional non-value-added handling of product, will also feature in the upgrade. Some existing equipment, such as the cheese vats, salting belts and cheese tower, will be modified to improve capacity.
The upgrade will start later this year and is expected to be completed by the autumn of 2013.
Further investment in the site will upgrade the whey plant to cope with the facility’s higher output level. “We’ve only been going just over 10 years but we have a growth agenda. So when we complete this, we’ll have a bigger business with more farmers supplying us, a better cost base, and a better carbon footprint,” said Kennedy.
The investment follows growth in demand for cheese and whey powder plus rising sales for British and Scottish cheeses at home and in Europe.
Kennedy added that the facility will help the UK meet its commitment to expand the national supply of milk.
The expanded facility will be run by "broadly the same number of staff'" although some may be required to retrain. “We’re increasing the output but not increasing the jobs. So some of the lesser skilled jobs will go but some of the ones that remain will be significantly upskilled and upweighted,” said Kennedy.
Lockerbie’s proximity to dairy producers in and southwest Scotland, plus its good motorway connections make it an ideal location, said Kennedy.
National Farmers Union (NFU) dairy board chairman, Mansel Raymond, said: “Investment on this scale in modern dairy processing is truly excellent news.
“Investment of this type, not only on UK soil, but by a farmer-owned cooperative business is very exciting. Milk Link’s plans not only represent investment in world class, efficient manufacturing capacity, but signal a business strategy of market growth in both domestic and export markets at its core.
“The news will be welcomed by Milk Link members and wider NFU members alike, for whom this represents an opportunity to tap into added value markets for their milk.”
Scottish government secretary for rural affairs, Richard Lochhead, said: “This is superb news for Lockerbie – ensuring that the creamery can look forward to a very bright future. As well as securing vital jobs, the creamery expansion will provide a boost for farmers as the amount of milk required increases to meet demand.”
Milk Link, which turned over £586M in 2010/11, is already the UK’s largest cheese maker and is owned by more than 1,600 dairy farmers.