Farmers First will take over operations in early January 2018 and the new business will trade as Farmers Fresh Wales, giving the group a slaughter capacity of more than 30,000 lambs per week.
Farmers Fresh Wales will act as a sister business to the existing Farmers Fresh abattoir at Kenilworth in Warwickshire, supplying lamb and mutton to both export and domestic customers.
Speaking at the Welsh Winter Fair, Farmers First chairman Terry Bayliss said: "We have long held an aspiration to process stock in Wales, and today's announcement brings this to fruition."
Farmers First is a farmer-owned, farmer-led business, owned by over 2,700 farmer shareholders from across the United Kingdom, with over 1,100 farmers in Wales. The business was set up in 1998 to create demand for British lamb, and gain access to European markets. Since inception, the company has exported more than 12 million lambs and sheep to continental Europe as well as supplying customers in London and across the Midlands.
"We pursue viable markets for UK lamb, particularly in continental Europe," said Bayliss. "By generating additional demand in the marketplace, we create more competition among buyers of UK finished lambs, supporting farmgate prices against greater erosion by our global rivals."
Export markets have proved critical to UK sheep producers. UK figures from the AHDB for January to September this year showed that sheepmeat exports to the EU have grown by 10% over 2016, from 53,180 tonnes (t) to 58,540t. This equates to a 17% increase in value to £266 million.
Expansion of the Farmers First group through this strategic acquisition is expected to bring additional capacity to meet the demand from European customers.
"While the uncertainty over future trading arrangements will continue," said Bayliss. "We as a business will strengthen our ties with our closest and most valued customers, right across the EU."