January 17, 2013


Müller Dairy UK announces US$27 million butter processing investment




An investment of GBP17 million (US$27.3 million) in a new butter manufacturing plant at its existing Market Drayton site was announced by Müller Dairy UK, marking its entry into the British butter market.


Once fully operational, the facility will have the capacity to process 90,000 tonnes of cream - Müller Wiseman Dairies' entire yearly output of cream. According to the firm, the Shropshire-based butter manufacturing plant will be the largest of its kind in the UK once completed.


Ronald Kers, CEO of Müller Dairy UK and Ireland (the parent company of Müller Wiseman Dairies), revealed the firm's intentions at the Semex UK conference in Glasgow, Scotland earlier this week.


According to the company, the investment is a 'major step towards hedging against cream commodity volatility'. In his presentation, Kers spoke about the company's current failure to "capitalise" on butter export opportunities, and the difficulties it has faced as a result of the global lull in commodity cream prices.


"I also spoke about the extent to which the Müller Wiseman business has suffered as a result of the collapse in the global commodity cream market - the business has no choice other than to sell surplus cream at commodity prices, whatever these market prices are," said Kers' presentation.


Kers revealed that Müller Dairy UK had taken the decision to invest 'with the group's support'. "It will have the capacity to utilise Müller Wiseman's entire annual output of cream, if that is what gives us the best returns in the market cycle," said Kers.


He also said, "It is important to stress that this will not protect us completely from volatility in global markets. But it will give us options which we currently do not have. That's good news for us, and for the dairy farmers who supply us."


Kers added that the facility is "on track for commissioning and first production in autumn this year."