Arable farmers in Angus, Tayside, are set to invest £13-14 million in a new 90,000 tonne capacity advanced grain processing plant at Glenesk, Montrose, to cash in on Scotland’s expanding market for malting barley.

Farmers claim it will be the first fully integrated supply chain operation of its kind in the UK and will be unique in having a direct conveyor link to Greencore’s adjoining maltings (pictured).

Savings in transport costs alone from moving grain direct from farm to the new store – rather than to a third-party store – are estimated at £15-20/tonne plus the value which will be added by delivering a more consistent product processed in a modern, central plant and on-tap availability to the maltings.

“The investment in this state-of-the-art facility will be worth it just for the benefit of getting grain moved quickly at harvest time without the risk of rejection on arrival at the maltings,” said David Fairlie, Kikrton, Monikie, Dundee, who is one of eight Angus farmers behind the project, which is to be known as the Angus Cereal Partnership.

Storage

The first phase of the development for half the eventual projected storage capacity – 45,000 tonnes – is due for completion in time for the 2009 harvest, subject to planning approval, with the second phase following within five years.

A third of the capital requirement will be met by farmers themselves on the basis of a £40-£45 investment for each tonne of grain committed to the new plant with the balance of funding coming from bank borrowing over a 10-year repayment period. It is also hoped to attract a grant from the Scottish Government’s recently-launched Rural Development Programme.

Angus farmers produce more than 500,000 tonnes of grain annually, 60% of which is potentially high quality malting barley. Greencore’s malting plant at Montrose has an annual requirement of 62,000 tonnes and the company is keen to source more grain from dedicated suppliers in a partnership arrangement involving growers, marketing agents and distillers.

High intake

The new facility, when completed, will include silo storage for 90,000 tonnes of barley with high capacity intake and 150 tonnes/hour drying capability. Further processing facilities will ensure the supply of high quality dressed malting barley direct to the maltings.

The aim is a 48 hour collection service from farms, seven days a week during the busy harvest period.

“The standard of investment will be significantly higher than on-farm facilities,” said Mr Fairlie. “The objective is for growers to own a first-stage processing facility to capture greater value from the supply chain and service the needs of growers at harvest time.”

Grainfarmers

The management of the new plant and the marketing of the grain will be handled by the national grain marketing organisation, Grainfarmers, who already manage Aberdeen Grain’s storage and drying plant at Newmachar, Aberdeen.

With a turnover of £371 million, Grainfarmers market 3.5 million tonnes of grain a year throughout the UK and aim to help growers achieve the top 15% for returns by the blending and segregation of different qualities and varieties of grain and using their marketing strength to achieve the best return.

A recent survey in Aberdeenshire indicated that 78% of on-farm grain stores were more than 15 years old – and 30% twice as old – at a time when processors are demanding increasingly higher standards.

“The farmer members of the Angus Cereal Partnership will own what will be the most modern advanced malting barley processing facility in Scotland,” said Grainfarmers regional general manager, Bruce Ferguson.

“The value of farmers’ grain will be retained and enhanced and rejections will become a thing of the past.”

Transport savings

Mr Ferguson said the biggest saving would be in transport costs with grain moving from the farm direct to the new central store and then by conveyor to the maltings compared with the present system of moving grain from the field to a farm store and then on to a third party merchant’s store before arriving at another store at the maltings.

Greencore Malt chief executive, David Wilkes, said an additional 198,000 tonnes of malt would be required by 2011 to meet projected increased demand from whisky distillers.

Latest figures from the Scotch Whisky Association show that soaring global demand for Scotch whisky has increased annual sales to a record £2.8 billion. Exports were 14% higher last year and equivalent to more than a billion bottles. Rising demand has seen a number of mothballed distilleries coming back into productuion while others are expanding output.

The Angus Cereal Partnership is looking to attract prospective members from within a 30-mile radius of Montrose. Meetings will be held on May 15 at the Royal Hotel, Forfar, at 1.00pm and the Park Hotel, Montrose, at 7.00pm.