30 June 2000

Group unveils plans to establish first GM-free milk factory

By Tamarind Davidson

A GROUP of 25 dairy farmers has revealed plans to build the first factory to specialise in GM-free milk.

The aim is to begin processing over 200m litres a year at a site near Burton-on-Trent, Staffs, by Oct 2001.

The group – Amelca – is busy recruiting 130 top dairy producers in the area to meet the target.

The total cost of the new venture is £25-30m. Farmers will contribute about £4m of this through a 2p/litre shareholder levy. The rest will come from banks and the City and there are already offers on the table, says management consultant David Waller of PriceWaterhouseCoopers. Further announcements are expected in September once the prospectus has been released.

"We are emphasising production of non-GM milk which will make up about 80% of the total liquid volume," says Mr. Waller. "This is as defined under EU directives, whereby we can guarantee that at no stage down the line have there been any GM inputs.

"Obviously farmers incur extra costs with the price of the feed and more precise record keeping, hence the reason for the additional premium of 1-1.25p/litre, on top of the normal guaranteed 1p. We will also be encouraging the organic side. The factory will be built with the capacity to expand and this is what really appeals to the farmers. They can commit themselves early on knowing that they have the opportunity to increase volumes."

Agrifood consultant Roger Metcalf said: "I hope it will take off and I will certainly give it as much encouragement as I can.

"Unless you take over an existing business you have to enter the market in a modest scale with room to expand if necessary. They have the right farmers and the right specialists involved to succeed."

Meanwhile, Dutch entrepreneur Ronald Akkerman plans to build a factory in south Wales to make Edam cheese, according to recent reports. At a cost of about £30m, the plant will process 270m litres of milk a year and should be operational by Oct 2001.

The shareholder levy will be about 2.5p/litre for UK suppliers, who will provide between £5-£6m towards funding the project. They will receive a guaranteed premium of 1.5p/litre. A further £10m may be available via Welsh Executive and EU funding.

"This is excellent news for the industry," says Mr. Metcalf. "But I fear the neighbouring Dairy Crest plant at Haverfordwest will be forced to close as competition sets in. This will mean finding another home for 100m litres of milk." &#42