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Dairy Crest buys milk firm out of administration saving 40 jobs
Dairy Crest has bought specialist milk business Proper Welsh Milk out of administration, saving 40 jobs.
The business and assets were acquired from the firms administrator BDO for £325,000
Proper Welsh Milk was founded in 2011 and invested over £1m in a new dairy on the site of the former Whitland Creamery on the borders of Carmarthenshire and Pembrokeshire. Since then the company has been hit by cash flow problems and went into administration on March 1 2013. It employs around 40 people and packs local milk for Tesco, Marks & Spencer and a number of other customers. On January 14th the firm launched its product - 100% Proper Welsh Milk - into Tesco stores across north Wales.
Speaking at the time of the launch, director of the producer group supplying Proper Welsh, Dai Miles said: We all know that consumers want Welsh Milk, however for years thats meant buying pints that have done an extra 200+ miles just because someone has closed the local dairy, and moved it to central England. We think this is what consumers would consider - local milk - and weve been working hard to set up a business that can deliver great-tasting, fresher milk that simply hasnt taken the West Midlands route to our local stores.
In a statement, Dairy Crest said it was committed to supporting dairy farming in Wales and was one of the countrys biggest milk buyers, however, until now all of its Welsh milk has been packed in England.
Commenting on the acquisition, Dairy Crest chief executive, Mark Allen said: We are delighted to be the new owners of this business, which we believe has a bright future. Our priority is to maintain supply to customers and use this modern dairy in a strong milk field to help us to develop new products, such as vitamin-enriched milk. We welcome the employees of Proper Welsh Milk to Dairy Crest and look forward to working with them.
BDOs joint administrator Simon Girling added: We are pleased that this important facility in the local community has been preserved and can now enter a new era with confidence, with the support of an industry major.
Dairy Crest recently stabilised its business with the renewal of it liquid milk contract with Sainsbury in a £210m deal that runs out in 2017.
City analyst Panmure Gordon said that the deal had removed a key risk to the firms plan to return the dairies business to an acceptable level of profitability. Dairy Crest was now on target to reach its dairies division target of 3% operating margin. Other City analysts welcomed the news as the deal removed an immediate challenge for the firms supermarket business.
