Million-pound loan from Finance Wales helps North Wales dairy co-operative expand cheese production

Wales’ oldest and largest dairy co-operative is expanding its cheese production facilities and helping to fund the development costs with a £1 million loan from the Wales Capital Growth Fund managed by Finance Wales.

South Caernarfon Creameries (SCC) first started operating at the site near Pwllheli in 1937 and will use the funding to modernise its production facilities and increase its first phase capacity from 9,500 to 11,500 tonnes a year.

The expansion is part of South Caernarfon Creameries’ long-term growth strategy which will see the continued development of its own Dragon premium cheese brand which is sold across the UK by major food retailers.

The company has supported North Wales’ agricultural sector for over three quarters of a century and currently employs 90 local staff.  Over 90 million litres of milk sourced from local suppliers is processed at the Pwllheli site each year.
Alan Jones, South Caernarfon Creameries’ Managing Director has spent 18 years with the company and he believes the development of the facilities is critical to the business’ future:  “We reviewed our business model in 2010 and decided to focus on the development of our core products of Welsh cheese and butter. Our Dragon branded cheese is the leading Welsh brand and is available in most UK supermarkets. This investment to develop our facilities is required to further grow the brand as well as to enable us to develop other market opportunities.

“This funding package supports our expansion plans. Finance Wales’ loan will help fund the initial development phase. The new development will provide us with a very efficient and flexible production facility which will further support our long-term growth plan.”

Mr Jones is also a long-standing member of the Dairy Strategy for Wales Group which liaises with the Welsh Government on key industry issues. 

Welcoming news of South Caernarfon Creameries’ expansion, Economy Minister, Edwina Hart said: “The £20m Wales Capital Growth Fund was established by the Welsh Government in response to demand from Welsh SMEs for short term working capital and I am delighted to see how it is supporting such an important co-operative to expand and increase efficiencies and capacity.

“The expansion will not only support the farming community in the region but will also help support the Welsh Government’s aim to increase annual sales of the food and drink industry by  30% by  2020.”
Finance Wales Investment Executive, Rhodri Evans structured the loan from the Wales Capital Growth Fund. He said: “Having spent most of my career working in North Wales, I know how important South Caernarfon Creameries is to the area’s agricultural community.  It has been operating on the same site near Chwilog since 1937 and is also a significant local employer.
“Alan and his team have transformed South Caernarfon Creameries since 2010 and this investment provides them with the funding to continue this transformation. Expanding cheese production is a major development for the company and welcome news for the local economy.  Finance Wales has come up with a short-term capital bridge-funding package to get the project underway.”

South Caernarfon Creameries has been recognised as a forward-thinking co-operative with a strong working relationship with its loyal members.  Its cheese scooped five top awards at this year’s International Cheese Awards.