Farmer-owned dairy co-op South Caernarfon Creameries has reported profits of £4.1m on the back of a 17% increase in sales to a record £71.5m.
The Welsh co-op hailed the results for the year to March 2022 as a recovery from the effects of the Covid-19 pandemic, adding that it has ploughed £3.8m back into its investment programme Project Dragon, a five-year £20m plan to boost production at its Chwilog dairy near Pwllheli.
This will boost production from 16,000 tons a year to 23,000 tons by 2024, with an extra 30 jobs created, taking its workforce to over 160.
Project Dragon also includes new facilities for milk reception, additional cheese production and packing with work continuing to improve environmental and energy performance.
Managing director Alan Wyn Jones said: “Good progress has been achieved in what has and continues to be a very challenging period for everyone as well as the unimaginable circumstances in Ukraine adding to supply chain issues caused by the post-pandemic reopening of the economy.
“Despite that the business has performed strongly, increasing turnover in volume and value and with profits again up on the previous year at 5.8% of sales, above our five-year average of 4.9%.
“The pandemic led to increased sales in our largest market, UK retail, with strong consumption in the home and business to business sales performing better than expected.
“Demand has continued to recover in the smaller wholesale markets and in foodservices though not yet to pre-pandemic levels but we have made better than expected profits while providing our members with one of the most competitive milk prices in Wales.
“This was achieved at the same time as a major investment in Project Dragon which has seen the new effluent treatment plant completed with work starting on the whey processing facility that will be operational by autumn 2023.”
The co-op, which is owned by its 145 farmer-members across north, mid and west Wales, said the resultshave allowed to pay the second highest milk price in Wales to its producers, an annual average of 31.53p a litre.
It also able to allocate nearly £1m in dividends to its members, many of whom have been with the co-op since it was founded in 1938, and that record payout amounted to just over 25% of SCC’s profits.
Wyn Jones added: “Despite ongoing challenges, the business has made good progress this year with significant ongoing investment at the Creamery which will enhance performance and further futureproof the business.
“Dairy is in the spotlight around concerns over environmental footprint and animal welfare and here we also take our responsibilities seriously and we will continue to build upon the great industry work in this area in the year ahead.
“As our consumer attitudes change we must continue to work to ensure that they continue to enjoy the great taste and nutrition of dairy without any associated climate or animal welfare concerns.
“We would not have made the progress we have to date without the continued commitment and hard work of all our staff who have continued to deliver for our members despite the challenges of the last year. We extend our thanks to them all.”