A First Milk spokeswoman was unable to disclose the amount paid for the businesses - which together turnover around £30m and operate from two facilities adjacent to one another - but said the firm had paid a sum it considered a "fair value".
Kingdom Dairies produces cottage- and soft cheese for major retail and foodservice customers, as well as food manufacturers; Kingdom Cheese supplies mozzarella cheese, cheddar mixes and blends to foodservice, wholesale, and pizza chain clients.
Asked about job security for 140 Kingdom employees, the spokeswoman said: "We have no plans to make any changes right now. We are looking to a broad understanding of the operation, their customers and the opportunities as part of our integration plan over the coming weeks and months."
Kate Allum, First Milk chief executive, said the acquisition (for an undisclosed amount) would enable the firm to diversify its product and customer base, grow turnover and provide new opportunities to sell grated cheese products.
Dairy export drive
She said the purchase also strengthened First Milk’s retail category presence and gave it a significant presence in the foodservice arena.
“Kingdom Dairies has a growing export portfolio, which complements the work on cheese, powder and butter we have been doing recently with [dairy product supplier] Eilers & Wheelers in international markets," said Allum.
“The flexibility of the Kingdom Dairies processing facility provides us with a wide range of new product development opportunities for soft cheese. We will explore options across both branded and retail private label market opportunities.
The spokeswoman added that the Eilers & Wheeler partnership provided First Milk with an "experienced partner to drive our export sales", given that world markets now offered "strong margins for UK dairy products ... with most commentators predicting that global demand will continue".
"Kingdom has a growing export portfolio," she added, "which complements the work on cheese, powder and butter, we have been doing recently with Eilers & Wheeler in international markets".
First Milk announced last October that it hoped to start building a new multi-million pound creamery in Campbeltown early this year. Funds for the new build are contingent upon the sale of an existing creamery site in the town to Tesco, with both companies submitting a linked planning application.
Asked whether construction had started, given Argyll & Bute Council's acceptance of Tesco's application to build a new store last year, the spokeswoman said: "We are awaiting the conclusion of discussions between Argyll & Bute Council and Tesco regarding final planning procedures. Once these are completed, then we can look to move forward to the next stage of exchanging contracts on the current creamery site."
First Milk produces 16 per cent of all Great Britain’s liquid milk, as well as cheese and dairy ingredients. It also holds a 10 per cent stake in Robert Wiseman Dairies.