A farmer-owned dairy co-operative based in Wales has delivered a record year, with operating profits of £3.4 million on sales of £61.5 million.
South Caernarfon Creameries (SCC) processed record volumes of milk in the last 12 months, and this trend is set to continue.
The Welsh cheesemaker's 135 farmer suppliers also received an end of year dividend which totalled £806,000, nearly a quarter of its profits.
The co-operative achieved record results alongside work on a major expansion at their headquarters at Chwilog, near Pwllheli, which will be completed by 2024.
It will increase capacity at the co-operative from the current 15,000 tons of cheese a year to 23,000 tons and create an extra 30 jobs, taking the workforce to 160.
Managing director Alan Wyn Jones said: “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.”
Mr Jones said that dairy markets had recovered quickly from the early months of the pandemic and a slowdown in non-retail sales had been more than made up for by an increase in supermarket sales across the UK.
This has followed on from a strong trend of growth by SCC with sales doubling in the last five years from £30m to £60m which meant the production capacity of the existing plant had been reached.
He added: “The site processed record volumes of milk in the last 12 months and this trend will continue as we carry on growing while maintaining our high quality standards.
“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."
Mr Jones said that the new Brexit trading arrangements had added costs and administration to exporting, which was having a negative impact on returns in the UK.
He also said this was making selling SCC's products into the wider market more difficult and costly than it had been in the past.
“While 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, 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 take advantage of to deliver long-term business performance and prosperity for our stakeholders.”
The current expansion of SCC's HQ is aimed at increasing production capacity and improving its operational and environmental performance.
The first phase of the project, a waste treatment plant, is nearing completion with work starting on expanding their production capacity and installing a new whey plant.
This will see an increase in the amount of milk processed at the plant from the current level of 130m litres to more than 200m litres.
