First Milk's partnership with cheese supplier Adams Foods could create up to 100 new jobs and would represent at least an extra 50,000t of first-year sales for Adams Foods.
Kerrygold is one of Adams Foods brands
Adams Foods ceo Ian Toal claimed the deal would take its annual sales to more than £500M and would guarantee retailers, wholesalers and foodservice customers a sustainable, traceable, supply of UK hard cheese.
"There's a lot to be tied down, but there will be in the region of 50 - 100 jobs created, most on the Adams Foods side," a spokeswoman for the partners said.
'Major investment'
"It represents a further major investment in building the market for both British and Irish sourced cheese, over and above the £60 million we have already invested in the business, including our state of the art packing facility in Leek and our recently opened innovation centre," said Toal.
Kate Allum, ceo of dairy cooperative First Milk, said the partnership secured the future of its members' milk supply. "Additionally, it will provide a platform for us to focus more of our time and resources on priority growth areas like brand development, lifestyle nutrition and exports."
The company claims the agreement would secure a sustainable, long-term outlet for most of its hard cheese and entail significant investment at its creameries.
Greater stability
Both partners said the move, subject to regulatory approval, would provide greater stability for the whole UK dairy industry at a time of considerable volatility for farmers and processors.
Just over a year ago, Adams Foods announced an expansion of its cheese factory in Leek, Staffordshire, and the creation of a £1.5M development and innovation centre.
First Milk provides a range of products, such as soft cheeses and skimmed milk powder to a global market. Based in Glasgow, it has eight UK manufacturing site and employs 667 people. Brands include the Lake District Dairy Company and Mull of Kintyre.
Adams Foods is a wholly owned subsidiary of the Irish Dairy Board and was formed in 2010 out of the merger of The Kerrygold Company and North Downs Dairy. Annual sales of the newly formed group were then estimated to be about £335M. Brands include Pilgrims Choice, Mu and Kerrygold.
