Müller Milk & Ingredients has confirmed that it is proposing to invest £15 million over the next three years in Scotland’s largest fresh milk dairy at Bellshill as part of a strategic review of its network of Scottish dairies.
The proposed investment at Bellshill will improve efficiencies and competitiveness whilst giving the dairy the capability to broaden the range of products it is able to make with milk produced by Scottish farmers.
Müller is also continuing to investigate further opportunities to grow its business in Scotland as it seeks to build a diverse dairy business in the UK.
As part of the review of the structure of its Scottish dairy network, Müller has confirmed a 45 day statutory consultation to examine the potential winding down of milk processing at its smaller Aberdeen and East Kilbride dairies. Both dairies are operating well below full utilisation with more than 60% of the capacity at Aberdeen dairy unused.
While Müller’s network of distribution depots in Scotland is not under review, some roles at Aberdeen depot will also fall under consultation. A total of 229 posts are affected across the Aberdeen and East Kilbride sites.
During the review period the business will consult with its employees and their representatives at the Aberdeen and East Kilbride sites to fully assess and evaluate the proposal. It should be stressed that no decisions will be taken until the consultation period is complete and the business has had the opportunity to review its findings.
In the event of a decision to wind down processing operations at the Aberdeen dairy, all 43 farmers supplying the site will be offered the opportunity to continue supplying the business, conditional on the acceptance of a 1.75 pence per litre transport charge which reflects the need to move the milk to Bellshill for processing.
Farmers in the area who don’t wish to continue supplying Müller in the longer term in the event of the closure of Aberdeen dairy will avoid the transport charge and their contracts will terminate on expiry of the 12 months’ notice, giving them time to make alternative arrangements for their milk production.
Andrew McInnes, Managing Director of Müller Milk & Ingredients said:
“We aim to reinvigorate our fresh milk and ingredients business in Scotland and propose to invest to make Bellshill a centre of excellence for dairy, benefitting consumers, customers, employees and farmers.
“It is important to stress that the status quo is just not viable in the medium term. Our Scottish dairies are inefficient and costly which is putting a brake on the innovation and investment needed to stimulate new demand for dairy products.
“Our Aberdeen dairy is operating at less than 40% of its capacity and milk production from farmers in the North East is far in excess of customer requirements in the area.
“Our small dairy in East Kilbride makes products including flavoured milks and potted cream and we believe that we can gain important efficiencies by relocating that production to Bellshill, which is nearby.
“We will enter the consultation with an open mind and will rigorously assess the situation and listen to our colleagues before arriving at a decision.”
NFU Scotland’s North East Chairman, and Muller supplier, Roddy Catto from Hillhead of Muirton Farm, Whitecairns, said: “The 43 dairy farmers supplying the Muller site at Aberdeen, which includes myself, have a lot to think about ahead of a meeting with the company, scheduled to take place at Thainstone on Friday morning (1 April).
“We need to hear more about the investment plans at Bellshill, what that might mean to the Muller business and balance that against any additional transport costs we would face as Muller suppliers were the Aberdeen site to be wound down.
“The meeting with Muller must leave all dairy farmers in the area with a clearer view on what these proposals will mean, so that farmers can take an informed decision now on their future in milk production.”
