First Milk flag© Tim Scrivener

Troubled milk processor First Milk has received the first tranche of government money to secure the future of its Campbeltown Creamery.

The Scottish government said it had sent the dairy co-operative a cheque for £311,000 to support the firm’s investment in new boilers for the facility.

Further instalments of the £416,000 food processing grant will be made as First Milk, which produces the famous Mull of Kintyre cheddar, implements the remainder of the project.

See also: Farmers welcome First Milk turnaround plan

The plant supports 40 dairy farms and 100 jobs in the Argyll dairy sector, which is the backbone of the local economy.

The grant payment represents a contribution towards the cost of whey-recovery equipment at the plant. It will also enable First Milk to buy new boilers and related infrastructure to make a positive contribution to the company’s bottom-line.

The payment to the UK’s largest dairy co-operative is part of the Scottish government’s dairy action plan aimed at helping the sector, which has been rocked by plunging milk prices.

Scottish rural affairs secretary Richard Lochhead said: “First Milk has faced some struggles of late, and it is clear that the company’s turnaround programme must begin to deliver soon.

“I hope these funds for the Campbeltown Creamery will improve the viability of the plant. A secure future for Campbeltown safeguards important jobs in Kintyre and provides a crucial market for the local milk producers who supply it.”

First Milk spokesman Paul Flanagan said: “We are very grateful to the Scottish government for this grant in relation to the whey investments we have made at the Campbeltown creamery over the past 18 months.

“Richard Lochhead and his team continue to work closely with us in a number of areas as we develop our businesses for the benefit of our farmers.”

NFU Scotland’s milk committee chairman Graeme Kilpatrick said: “This is extremely positive news for producers whose milk goes to Campbeltown Creamery. The new boilers will provide savings and the onus now is on the company to deliver on behalf of its members.

“Farmers need to see success domestically and in export markets and the focus will understandably be on First Milk’s turnaround plan going forward. We welcome the recognition by the Scottish government that dairying is crucial to the local economy in Kintyre.”