Around 100 west-Wales milk producers are to make a co-operative bid to buy the Dansco dairy at Newcastle Emlyn in Carmarthenshire.

The group has recruited Anderson Consulting and a firm of solicitors to assist with the attempted purchase of the specialist mozzarella production plant, which was owned by pizza giant McCains until July 2002.

Slow payments

The move follows complaints, dating back to April, about very slow payment for milk delivered to the plant and publication of trading figures showing the present owners made a £1.3m loss in the last year.

In October, the company told the Farmers Union of Wales in a letter that it had experienced cash flow problems during the summer, when around 30 producers gave two months notice that they intended to stop sending their milk.

The crisis deepened last week when BBC Cymru broadcast a report on an investigation by the corporation’s Kuwait office, which alleged that Mohammed Ali Soliman, the dairy’s current owner, had been convicted in his absence of a £250m fraud in 2002.

Kuwait Public Prosecution Office lawyers told the current affairs programme Manylu that Mr Soliman had been sentenced to jail when the company he owned there closed leaving hundreds of shareholders out of pocket.

Fled

But the businessman had fled to England where there was no extradition treaty with Kuwait.

He bought the Welsh creamery in 2002 and obtained a £1.6m processing and development grant from the Welsh Assembly

The recent revelations have raised questions about how diligently the assembly did its research before awarding the money. Rhodri Glyn Thomas, assembly member for Carmarthen East and Dinefwr, said Mr Soliman’s criminal history increased uncertainty surrounding the financial situation at Dansco.

An assembly response claimed that “all necessary financial and technical checks” were carried out over Dansco’s grant application.

“This involved scrutiny of audited accounts, a Companies House check and monitoring the project to ensure that the funding was used as set out in the application and according to the processing and marketing grant scheme criteria.”
The statement insisted that Dansco had met all the conditions of the PMG grant.