Record Profits

South Caernarfon Creameries has delivered a record year with operating profits of £3.4 million on sales of £61.5 million

South Caernarfon Creameries has delivered a record year with operating profits of £3.4 million on sales of £61.5 million. This was achieved alongside starting major expansion work on the site to increase capacity from the current 15,000 tons of cheese a year to 23,000 tons.

The Managing Director said: “Our main priority in the pandemic has been the health and well-being of our loyal staff as well as doing what we can to limit the impact of the virus on the business and its customers. But in a year like no other we have delivered a resilient business performance while continuing to pay one of the best milk prices in Wales to our farmer-members.”

The members, many of whom have been with the co-operative since it was founded in 1938, also received an end of year dividend; almost a quarter of the co-operatives profits was share. The dairy markets recovered quickly from the early months of the pandemic and a slowdown in non-retail sales was more than made up for by an increase in supermarket sales across the UK.

This has followed on from a strong trend of growth with sales doubling in the last five years from £30 million to £60 million which means the production capacity of the existing plant has been reached. The site processed record volumes of milk in the last 12 months and this trend is expected to continue as the business grows.

We are well-used to operating in a volatile global marketplace, but no-one could have foreseen the challenges of the last year in which the Covid crisis struck. Also the new Brexit trading arrangements have added costs and export administration is having a negative impact on returns in the UK making selling products into the wider market more difficult and costly than it has been in the past.

The Managing Director said: “The year ahead will remain challenging as we continue to manage the business alongside the pandemic conditions and seeing cost inflation now coming through from raw materials and key overheads, the positives are that global economies will continue to recover and the fundamentals of dairy look positive. Our focus remains on the delivery of our objectives and the opportunities ahead, which we are now well-placed to deliver long-term business performance and prosperity for our stakeholders.”

The current expansion, christened Project Dragon and supported by the Welsh Government European Agricultural Fund for Rural Development with £5 million from its Food Business Investment Scheme, is aimed at increasing production capacity and improving the operational and environmental performance. The first phase of the project, a waste treatment plant, is nearing completion with work now starting on expanding the production capacity and installing a new whey plant.