Lakeland Dairies has announced, as part of a new strategic direction for the co-op, the realigning of its processing footprint to maximise operational efficiencies and enhance value-add capabilities for the future.
- Future investments focused on value-add capability for the 2bn litre milk pool
- Closure of three sites to enhance efficiencies
- Investment in retained sites to add capabilities
- Maximise returns for farm families
Between now and quarter one of 2025, significant change will be implemented across the Lakeland Dairies business to ensure the co-operative is well placed to meet future market requirements with a realigned processing footprint to match milk supply profiles. This is the first step in a new strategy which will continue to be implemented across the Society in the coming months.
Over the course of 2023, the cross-border dairy processing co-operative has been assessing how best to create further processing efficiencies in the long-term interests and sustainability of its 3,200 farm families who produce 2bn litres of high-quality milk annually.
An integral component of this new operational direction is optimising the Lakeland Dairies processing footprint to ensure that the co-op is best placed to serve the needs of its loyal customer base and to continue to support its farm families. This will, in time, facilitate the co-op to further generate increased value-add capability. This new strategic direction will be carried out against the backdrop of evolving environmental realities and regulatory direction from a milk supply perspective.
After detailed and careful consideration, the Board of Lakeland Dairies has approved a plan where liquid milk production will transfer from Lakeland Dairies Monaghan to Lakeland Dairies Killeshandra. All other bulk milk handling activities will transfer to other Lakeland Dairies sites. This will result in the closure of the Monaghan site but not until quarter one 2025 as a major development project will now commence at Lakeland Dairies Killeshandra to process liquid milk there. It is envisaged that, following the ending of production in quarter one 2025, a process to sell the Monaghan site will take place.
Milk drying facilities at Lough Egish, Co. Monaghan will close in June 2024. Milk will continue to be processed at other sites, namely Lakeland Dairies Bailieboro, Killeshandra, Newtownards, Ballyrashane and Artigarvan. This has no impact on the Lakeland Agri feed and inputs operations at the neighbouring Lough Egish feed mill which will continue to grow and develop.
The Lakeland Dairies site in Banbridge, Co. Down, which has acted as a butter churning and packing and powder storage site, with no milk being directly processed there for many years, will close in June 2024. A process to sell the Banbridge site will commence shortly.
Regrettably, redundancies will be necessary to realise this strategy as operations will be ceased on the three sites. Exact details and numbers will be confirmed in due course but it is anticipated that 78 jobs will be impacted by the announcement. There will also be redeployment opportunities for some staff into vacant positions in the business.
Lakeland Dairies has commenced an engagement and consultation process with staff and their unions directly. The remaining 1,300 Lakeland Dairies staff will not be directly impacted by this announcement.
Lakeland Dairies’ Group Chief Executive Officer Colin Kelly said:
“As a business, we continually assess how we can take long-term strategic decisions that will benefit the Society for this and subsequent generations.
“Lakeland Dairies is a co-operative with a heritage spanning nearly 130 years. We have a strong balance sheet, strategically located sites in ROI and NI, a high-quality milk pool of some 2bn litres produced by 3,200 committed farm families, a customer base in over 100 global markets, and we are well placed to meet future demands. However, we are approaching a decade that will be different from the one that the industry has just experienced.
“The industry has come through a period of significant volume growth following the removal of milk quotas in 2015. Lakeland Dairies invested over €350m to support the ambition of our farm families to produce this additional milk and meet the latent demand at farm level for expansion. The next decade will be less about large volume growth and more about value-added growth and adding capability throughout the business. This will be done to drive the best possible returns for our farmers and to continue to offer our loyal customers the highest-quality products while supporting our people and our communities.
“We do appreciate that this announcement creates uncertainty for our colleagues and their families. We will work closely with them and support them throughout this process in which they will continue to be treated fairly and with respect. While this is a difficult decision, it is a crucial one to ensure that Lakeland Dairies is future-proofed and well-positioned to meet the challenges as well as the opportunities of the future.”