Dansco cheese plant goes into administration

The Dansco mozzarella cheese plant in south west Wales has gone into administration.

The move came 10 days after half the farmers supplying the creamery, located near Newcastle Emlyn, gave the company notice that they intended to terminate their contracts.

This was in response to late payment problems dating back to April 2006, with some producers claiming they were owed tens of thousands of pounds.

When a promise of catch-up payments was not honoured, about 50 suppliers poured their milk away for a day and notified Dansco that it had had broken the terms of their contracts.

The company’s bankers decided to appoint KPMG as administrators, with a remit to try to sell the plant as a going concern to one of four interested parties.

Members of the linked producer group, who claimed that closure would be a disaster for farmers and the rural economy, welcomed the decision.

Aled Jones, who farms a few miles from the plant, said he was relieved there was now a good chance that there would continue to be a local outlet for locally produced milk. 

Rhodri Glyn Thomas, a local Welsh Assembly member, said he hoped that KPMG would be able to stabilise the situation so that the factory could stay in business until a buyer were found.

Brian Walters, vice president of the Farmers Union of Wales, agreed. He claimed that the important south west Wales milk field would be devastated by the closure of another creamery so soon after the Aeron Valley cheese plant.

It was the most recent casualty in a long line of processing plants that had closed their doors. The loss of another 130 jobs and an outlet for milk from 100 farms was unthinkable.

Milk producers who had continued to supply milk despite Dansco’s cash flow problems deserved the reward of seeing the creamery pass into new ownership, he added.