DAIRY FARMERS of Britain has announced it is to close its Llangadog Creamery in South Wales with the loss of 172 jobs.
The factory was taken over in 2004 when DFOB bought Associated Co-operative Creameries.
It has been under review ever since, the firm said, because of poor financial performance.
DFOB also blamed the closure on consolidation in the industry and cost-cutting in the supply chain.
Up to 210m litres of milk will have to find another processor when the plant ceases production this summer.
Chief executive Malcolm Smith said: “This decision follows a full review of the Llangadog business and has been taken as a requirement to improve the overall business efficiency for our shareholders, the farmer members.
“Our members will be pleased to hear the rest of the business is performing very satisfactorily and this decision will enhance the long-term profitability of the business.
“DFOB is committed to its remaining production facilities in Wales and its farmer members in Wales, and we will be making every effort to minimise disruption to any customers directly or indirectly affected by the closure.”
But the Farmers Union of Wales has reacted angrily to the news. “This is a major body blow for the economy of west Wales,” said vice president Brian Walters.
“It’s not only a personal disaster for the 180 people who will directly lose their jobs but it will also have an impact on farmers, suppliers and contractors across a wide area.
“The decision to close the plant is a bolt from the blue,” he added.
“It was generally felt that the creamery‘s future had been secured after it was taken over by Dairy Farmers of Britain in August last year.”
DFOB‘s continuining Welsh operations include the UK‘s fourth largest cheese factory in Llandyrnog, turning around 280m litres of milk into cheddar.
It also processes some 95m litres into fresh and milk and cream in Cardiff.