By Chris Story

Last updated at 15:06, Friday, 22 June 2012

A £10 million upgrade at a Cumbrian creamery is starting to pay off as new products roll off its production lines.

First Milk revealed the progress being made following the investment at its Aspatria dairy as it announced pre-tax profits of £13.1m.

It is a figure that comes on the back of the growing success of its Lake District Cheese brand, made at the plant. This is now the country’s fourth-biggest cheddar name, with a worth estimated at £65m.

Current investment at Aspatria – being made over the past financial year and the next – is centred on its whey processing facility.

That has followed a deal New Zealand-based dairy farmer co-operative Fonterra to supply high quality whey powder.

This will be used to go into things such as energy drinks and high protein yoghurts. Whey was previously dried to use in animal feeds.

Details of the progress at Aspatria were announced by First Milk chairman Bill Mustoe as he commented on the company’s financial performance.

He said: “Notably during the year we set up a joint venture with the New Zealand company Fonterra to produce premium whey proteins at our Lake District Creamery, with the first product for the joint venture being produced over the last few weeks.”

Fonterra struck the deal with First Milk to supply European customers of its growing food ingredients business.

It has already been hailed as good news for Aspatria, securing jobs at the dairy.

First Milk, a farmer-owned co-operative, is a key player in Cumbrian agriculture with more than 200 county producers. Financial results announced this week showed that £9.6m of the pre-tax profits was linked to money made from its sale of shares in Wiseman Dairies.

The firm also said that over the course of the year it had increased the prices paid to farmers with those in the liquid pool getting an additional 2.9 pence per litre and those in the cheese and balancing pools getting another 2.98ppl. It added that net debt rose mainly as a result of increased stocks needed to fuel the growth in sales of Lake District Cheese, investment in its sites and the acquisition of Kingdom Cheese and Kingdom Dairies.

Last month, First Milk announced cuts to its liquid pool price of 1.85ppl, a 1.25ppl cut to its cheese pool and 1.4ppl drop in its balancing pool price. But, while disappointed at having to make that decision, Mr Mustoe believes there are grounds for optimism.

He said: “Right now the global demand for dairy has been hit by some short-term over supply.

“However, the market will recover as supply and demand move back into balance, and returns will be strong in the long-term.”

The chairman was pleased with paying members a return on their investment related to company performance in the first half of this financial year and the dividend announced in March as a result of the margins made.

The Lake District Cheese factory employs more than 80 people and has experienced a transformation of fortunes since being taken over by First Milk in 2006.

First published at 14:07, Friday, 22 June 2012
Published by http://www.cumberlandnews.co.uk