Dairy safe but 65 jobs lost in buyout

A MANAGEMENT buyout will result in the loss of 65 jobs at a North-east dairy.

Half the production of the Nairn creamery – mainly supermarket business – will be transferred to Lockerbie after the sale by owners Claymore Dairies, which is 75 per cent owned by the international food conglomerate Arla Foods and 25 per cent by dairy farmers through the North Milk Co-op.

The MBO is expected to be completed by February 1.

Rumours have been rife of the possible closure of the loss-making Nairn plant which has lost half its milk supply over the past ten years because of dairy farms going out of production. The retention of the plant will mean that the 11 remaining dairy farmers in the Highlands will still have a local outlet for their milk.

It is anticipated that the plant will continue to process around ten million litres of milk a year with half of the existing workforce being retained.

"Our proposals will secure many of the jobs at the dairy and also the future of the site," said operations director, Ian Larg, who is leading the MBO. "We believe there is a strong appeal in the area for locally produced and processed milk."

The new company will continue to deliver milk to shops throughout the Highlands. A deal has been struck with Arla to buy surplus milk for processing at Lockerbie and Arla also plans to establish a distribution centre at Dundee to serve supermarkets in the north.

Arla Foods director, Lars Dalsgaard, said the viability of the Nairn site had been under review for sometime.

"A management buyout is the best solution for all parties," he said. "Unfortunately, subject to the consultation process, the decision will lead to a number of redundancies."

North Milk Co-op chairman, Martin Bridges, welcomed the continuation of local processing.

"We hope the business will prove viable on a smaller scale," he said. "There has been an inevitability about the decision but the remaining dairy farmers in the Highlands are delighted that the processing of local milk in the area has been secured and that they will have the much needed security of a milk supply contract."

NFU Scotland's Allan Bowie said the future of milk production in the area depended on the continuation of a local milk processing business.

"Remote milk fields are hugely important to local economies and the job losses at Nairn will have a significant impact," said Bowie. "Dairy farmers are vital to the supply chain and creameries are key employers.

"As the demand for locally produced products increases, it is vitally important that milk buyers in the more remote areas do all they can to preserve the future of milk production for the good of the whole community."