A linked application process meant that funds for the building of the creamery in Campbeltown were contingent upon the sale of First Milk's existing site to Tesco, although the new creamery itself was approved by the council in July 2010.
Our sister site reported last month that permission for the new store had been delayed, with an Argyll & Bute Council spokeswoman confirming that the precise timeline for its approval was "a little up in the air" as the council sought to clarify several undisclosed issues of concern.
The delay meant that First Milk's sale of its existing site to Tesco - for an undisclosed amount - could not be finalised; accordingly the co-operative did not possess the necessary capital it needed to invest in its new facility.
Key funding source
Paul Flanagan, First Milk’s group communications director hailed the news as a “huge step” towards building the new creamery, saying: “We remain on track to exchange contracts with Tesco and start work on the new creamery site early in the New Year.”
Farmer-owned co-operative First Milk announced plans to replace its current Campbeltown creamery in July 2009, with an undisclosed proportion of funding contingent upon the sale of the site to Tesco.
The co-operative says that its current creamery’s limitations (it was built in the 1820s as a whisky distillery) meant that it “struggled to cope” with modern demands, and that without the new site prospects for the dairy industry in the area were “bleak”.
First Milk communications manager Jill Coyle said that First Milk specifically intended to increase production at the new facility to grow market share for its Mull of Kintyre brands, while Scottish Pride cheese will also be made at the new facility.
She added: “The new creamery will provide processing efficiencies which cannot be achieved at the current plant, and will also allow us to treat and process the whey from the cheese-making process, which is currently not utilised.”
Asked about potential new jobs, Coyle said: “We are continuing to work through the numbers of people who will be required to operate the new creamery.
“Unlike the existing facility, we will also be looking to process all of the cheese whey on site, as well as looking at other opportunities for processing flexibility and new product development.”
First Milk produces 16% of all Great Britain’s liquid milk, as well as cheese and dairy ingredients. It also holds a 10% stake in Robert Wiseman Dairies.