By Robert Harris

REVAMPED PLANS for a new Cheddar cheese factory in west Cumbria have been unveiled, almost a year after the project was first mooted.

 Partners in Cheese expects to get planning permission within the next month for a 44m set-up at Lillyhall.

Construction on the 27-acre greenfield site, Lakeland Dairy Park, is likely to start in early summer. The plant, based on a Dutch model processing 80,000t of cheese a year, should be operating by April 2006.

It would process 150m litres of milk a year, rising to 450m litres (40,000t of cheese) by spring 2009, said PiC managing director Ronald Akkerman.

The 12-month delay was caused by planning problems and the need to convince farmers of the business plan. A new supply co-op, Lakeland Dairy Farmers, has now been set up. “We have spent the last year building trust and giving farmers all the information they require,” he said.

PiC is banking initially on large farmers, disillusioned with the big co-ops, who used to supply groups like ACC, Glanbia and Nestle.

Most of the funding – about 26m – will come from bank borrowing. A further 15m of equity will be split between farmers, through a 5p/litre bank guarantee, and other backers, including PiC directors. Farmers are also expected to buy most of the shares which will be offered soon.

Mr Akkerman was certain he would recruit 100 farmers to supply the 150m litres of milk needed before building began. “We have been talking closely with potential customers. If we did not have sufficient assurance on sales we would not begin. How else could we convince farmers to invest?”

 Much of the cheese, eventually a mix of mature and mild Cheddar, will be sliced and packed on site for the retail sector and food service industry.

Vertical integration, coupled with the latest technology, would cut costs, he added. “I would be very disappointed if we did not achieve a premium of at least 1p/litre over the average for the region.”

The board of PiC would consist of three executive directors and three non-executives, all with extensive knowledge of the dairy industry, Mr Akkerman said.

robert.harris@rbi.co.uk