Farmers welcome sale of Dansco to Canadian processor

Dairy farmers and politicians have welcomed the sale of the troubled Dansco mozzarella cheese plant in Carmarthenshire to the Canadian dairy processing giant Saputo.

But the repayment of outstanding milk cheques and interest due to farmers remains unclear.

More than 100 current and former milk suppliers cheered chief executive Lino Saputo when he met them to pledge his company’s commitment to the future of the creamery.

He said his family had developed their world-wide dairy product business, which employs 8600 people at 47 plants, by having the right core business values, loyalty and trust.

 

Mutual benefit

A new management team would be prepared to look farmers and cheese buyers in the eye, and work to the mutual benefit of everyone involved, he said.

Mr Saputo said he hoped that producers would get the £1.5m they were owed in back payments for milk, plus some interest.

He also announced an immediate 0.5p/litre increase in the price of milk delivered to the Newcastle Emlyn plant.

“The acquisition compliments our current activities in European markets and is in line with the company’s objective of growing its global presence,” Mr Saputo said. “We are in this for the long term.”

 

Disgruntled producers

The plant, which took in 130m litres of milk a year to make 13,000t of mozzarella, was bought by Middle East businessman Mohammed Ali Soliman in 2002, and was awarded a £1.6m processing and marketing grant by the Welsh Assembly.

But in April 2006 farmers began complaining that payment dates were being missed. Problems came to a head in early March when disgruntled producers started diverting their milk to other companies, or even pouring it away.

A delegation met Carwyn Jones, Wales’s rural affairs minister, who was investigating the possibility of assisting a farmer buyout when Dansco called in administrator KPMG.

Within a week the plant was sold for £5.27m as a going concern to Saputo, one of four potential buyers.

 

Feeling upbeat

A KPMG spokeswoman told Farmers Weekly that the exact position of creditors would not be clear for some weeks.  

Dairy farmer Aled Jones, who milks 200 cows at Morlogws a few miles from the plant, said the sale was exactly what producers wanted.

“Dansco had no future as it had lost the confidence of its suppliers, and closure would have been a disaster for the area.  Now we all feel very upbeat and are ready to work with the new owners, who appear to have built their business on straight dealing.”

Carwyn Jones said the sale of the plant was the outcome everyone wanted to see. He promised that the Welsh Assembly Government was committed to helping the Welsh dairy industry in any way it could.

The Transport and General Workers’ union confirmed that the deal had safeguarded 130 jobs and indicated the possibility of future expansion.