Positive progress is being made to secure a sustainable future for Scotland's north-east dairy producers with potential investors identified for the development of a new specialist processing plant in the region.
The outcome of the dairy initiative, jointly supported by Opportunity North East and Aberdeenshire Council, was reported to dairy producers from across the region on Thursday (8 December) evening at a meeting at the Thainstone Centre.
The second stage of the dairy study has seen a prospectus selling the north-east dairy opportunity prepared and widely promoted in the UK and internationally. Three serious investment prospects have emerged from this work.
Peter Cook, Director of Food, Drink and Agriculture at ONE, said it is an important next step: “While it’s important to be realistic we are still at an early stage, we now have strongly interested dairy processing investors, a clear view on the market opportunities and a number of potential operating models.
“The identities of the interested parties remain commercial in confidence at this time. Helped by the recent improvement in milk prices we have a milk field that is largely sticking together. Producers were very positive at the meeting – this is their future.
“The immediate next step is to work up detailed business cases with the three interested parties. These will then be considered by a steering group, which can then put a final recommendation forward to the region’s dairy producers. Our intention is to reach this point by the end of March 2017,” said Mr Cook.
'Continued economic viability'
Councillor David Aitchison, Chair of Aberdeenshire Council’s Infrastructure Service Committee, whose remit includes economic development and agriculture, said: "This is a positive first step to ensuring the continued economic viability of dairy farming in the north-east. Partnership working has ensured that we have come this far and I am hopeful that there will be a positive outcome.”
A market options study for the north-east dairy sector was funded following the closure of the Muller Wiseman milk processing plant in Aberdeen and was commissioned on behalf of producers in Aberdeenshire and Angus by the Council and ONE. Plans to explore investment opportunities for the sector in greater detail then received the unanimous backing of dairy farmers at a meeting in September.
Almost all producers in the region have supply contracts with Muller Wiseman. Their milk is now trucked to Bellshill in Glasgow, but suffers a transport charge of 1.75p/l. This and generally low milk prices raised serious questions over the future of dairy production in the north-east of Scotland.
Opportunity North East (ONE) was launched in December 2015, following extensive consultation with the region’s business community and discussion with the public sector. It is the private sector’s response to the challenge of maximizing the oil and gas opportunity for the region long term and rebalancing the region’s economy to achieve sustainable prosperity.
