Westbury Dairies Limited, the joint venture between Arla* and First Milk, has today confirmed that full ownership of Westbury Dairies Limited has transferred to Arla. The joint venture company, located at Westbury, Wiltshire, operates the country’s most modern skimmed milk powder and bulk butter production facility.
First Milk has shared access of the site in various joint ventures for over 12 years, dating back to 2003. Arla became a partner in the joint venture in September 2010 and purchased the freehold of the site in December 2013.
The news is a further step for First Milk in reshaping its business. The agreement announced today will enable First Milk to continue to have access to the powder drying capacity at the Westbury site during peak milk production and at other pre-defined times of the year.
Taking full ownership of the joint venture is a strategic move for Arla and a natural step to providing the business with an opportunity to optimise its manufacturing footprint in the UK.
Peter Giørtz-Carlsen, Executive Vice President, Arla Foods UK said: “We are pleased to have come to this agreement. Arla has just launched Strategy 2020 in which we aim to grow our business in eight global dairy categories and six market regions around the world. The Westbury site is now an integral part of that global network of Arla production sites and will benefit from being so, further helping the UK to play an even more significant role in our global strategy.”
Mike Gallacher, First Milk Chief Executive added: “I am delighted to announce this significant step in the reshaping of First Milk around our core Cheese and Liquid business. This follows recent announcements of our return to trading profit, the establishment of a new Board and Governance structure, and the sale in December of the Glenfield Dairy subsidiary.
“While the dairy industry remains exceptionally tough, the progress we have made over the last nine months gives us the platform to focus this year on improving the relative returns to our members.
“We have worked very closely with Arla to reach this agreement and continue to see this as an important trading relationship for First Milk.”
NFU reaction
NFU is asking for First Milk to outline to members the effects of the announcement that Westbury Dairies Limited, the joint venture between Arla and First Milk, has today transferred full ownership to Arla.
This decision represents a consolidation for First Milk who look to continue to reshape their business but important questions now remain over how this will improve the bottom line for dairy farmers and the effect it will have on farmgate prices.
NFU chief dairy adviser Sian Davies said: “It is pleasing that Arla and First Milk have agreed a deal which suits their particular business models. As with any change to operating systems, we now need to ensure that this strategic move contributes to delivering a better return to farmers, as well as increased stability.
“Farmers supplying First Milk are still in a particularly difficult place and urgently need to see better returns from the reshaping of the business.”
NFU will continue to work closely with First Milk and its new Chairman Clive Sharpe as well as with Arla in these new arrangements to ensure the best deal for British farmers.
