DAIRY CREST has completed the first phase of its £50m investment to create the world‘s largest cheddar creamery at Davidstow, Cornwall.

Brian Eddy, general manager of the Davidstow creamery, said the new build and installation of equipment was now finished, and that the demolition of the old plant and buildings would commence in a few weeks.

The whole project would be completed by spring 2005.

The expansion has increased the creamery‘s capacity to 55,000t of cheese a year, although that would only be used when the market was ready for it, said Mr Eddy.

That is 20,000t more than the previous capacity, and would require a total of 550m litres of milk a year at full production.

However, the effect of CAP reform and possibly lower milk prices had sparked concern over security of milk supply, said Mark Taylor, commercial director of group sales.

He hoped that continued investment and protection of premium markets would give the dairy‘s suppliers the confidence to continue milking.

But he declined to give any assurances over future milk prices.