Arla Foods and its joint venture partner North Milk Coop are selling the Scottish Claymore Dairies based in Nairn to the local management with effect from 1 February 2010. The sell is directly in line with Arla Foods UK’s strategy of improving performance in standard milk, as it will generate significant efficiencies.
Arla Foods currently own a 75 per cent share in Claymore Dairies with North Milk Coop owning the remaining 25 per cent. In order for the sale to take place, Arla will purchase the 25 per cent share that Arla does not already own from North Milk Coop and will then sell the whole business to the management buyout team, led by Ian Larg who is currently operations director at the site.
The decision to sell the stake in Claymore allows Arla to consolidate all milk processing for Scottish retail customers into Lockerbie dairy, which is directly in line with Consumer UK’s long-term strategy of improving performance in standard milk, as this will generate significant efficiencies.
“As part of the agreement, we are proposing that we will transfer the milk currently processed for Morrisons and Asda from Claymore to our other Scottish dairy in Lockerbie and will open a distribution hub in Dundee to service our retail customers that are based in the Scottish Highlands,” Business Group Director for Supply Chain, Lars Dalsgaard says.
As part of the sale, a milk supply agreement has been put in place with North Milk Coop in which Claymore Dairies and Arla will purchase its milk. The volume purchased by Arla will be transported to Lockerbie for processing.
“The viability of the site has been under review for some time. When the site’s management team approached us about the possibility of them leading a management buyout of part of the business, both North Milk Coop and ourselves came to the conclusion that a management buyout was the best solution for all parties,” Lars Dalsgaard says.
Unfortunately, subject to the consultation process, the proposal to transfer the milk out of Nairn could lead to approximately 65 positions being made redundant.
“We believe that the buyout will secure the future of the site and the remaining jobs and we will be working with the buyout team to support them in every way we can during the transition to ensure the success of their new business,” Lars Dalsgaard says.