Arla Foods Dairy - Liquid Milk Processing, Lockerbie, United Kingdom

Arla Foods UK continues to increase its hold on the UK liquid milk supply market. During the past 12 months they became sole supplier for ASDA (agreement signed in May 2004 and contract active from November 2004) and more recently the main supplier for Morrisons (Morrisons also uses Dairy Crest), which was effective from October 2005.

For Arla’s initial processing commitment to ASDA of 200 million litres per year, Scottish milk was sourced from Sorn Milk, a member of Arla Foods Milk Partnership. Arla Foods UK will now supply 266 ASDA stores with over 450 million litres of milk per year (a deal worth £180 million per year).

These new supply contracts for major supermarket chains have lead the firm to increase their liquid milk processing capacity again by constructing a new dairy facility in Lockerbie, Scotland (ASDA has 34 Scottish stores).

Arla Foods UK has developed a relationship / agreement with Milk Link allowing them to construct the new dairy on the same Lockerbie site where Milk Link has its cheese production facility (The Cheese Company). The agreement allows for the two companies to share facilities and thus save costs on wastewater treatment, etc.

Phase one of the new dairy was completed in October 2005 and at full capacity it is able to process up to 150 million litres of fresh milk per year. The plant has required an estimated investment of £16 million (€23 million) for construction and outfitting and employs a workforce of over 100.

ARLA FOODS STRATEGY

As a result of the strategic decision to build a new dairy in Lockerbie, combined with investment in Claymore Dairies, Arla now has Scotland’s two most modern dairies. Arla Foods UK also has distribution centres in Scotland at Nairn and Coatbridge.

The investment into these new facilities was one of the deciding factors for Morrisons switching from Robert Wiseman Dairies to Arla Foods UK. ASDA's change of supplier decision was based on its three original suppliers coming up with a new supply chain that would give ASDA a dedicated group of farmers. Arla won the tender. This change in supplier strategy signals a return for ASDA to its dairy roots, with ASDA and Arla once being part of Yorkshire-based Associated Dairies, which was formed in the 1960s.

BOTTLE HANDLING AND PRODUCTION AUTOMATION

Arla Foods UK awarded Midlands-based supplier Isoma Conveyors the contract for the bottle handling systems; a turnkey project to manufacture, install and automate all production line equipment from empty bottle supply through filling, labelling and trolley packing. Isoma worked with Arla Foods UK to implement new designs and technologies within the Scottish site. The new bottling equipment was developed at Isoma’s Derbyshire factory.

The system also incorporates Isoma de-elevator inverters. Due to the strict hygiene standards demanded by the UK’s supermarkets most production lines have to incorporate a means for inverting open top bottles and air rinsing them before they are filled with product. In addition, the Isoma bottle turner ensures all the newly filled bottles are in the correct orientation. The system also incorporates various elevators and conveyors to augment the efficiency of the filling process at the new facility.

CONTRACTORS

Plans were announced for the new Lockerbie liquid milk processing facility in August 2004. Excavation for the construction of the new facility started in late March 2005. Barr Ltd of Paisley was awarded the contract for the construction of a creamery extension at the Lockerbie site. T.A Kirkpatrick & Co. Ltd was responsible for the steel frame building construction.

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