Northern Ireland's Enterprise and Trade Minister Jonathan Bell (centre) with Lakeland's chairman Alo Duffy (left) and CEO Michael Hanley at the opening of the co-op's new €10m logistics centre at Newtownards, Co Down.

Lakeland Dairies new €10m distribution facility will have a pay-back of less than five years due to savings in warehousing rents and staffing requirements.

The 14,000 pallet facility at their Newtownards plant stretches 30m high, and operates in total darkness due to its fully automated design.

"It's the first of its kind in Europe, and because there aren't people working in the facility, we can reduce the oxygen content in the atmosphere inside by 30pc, which allows us to eliminate the possibility of a fire in the facility," explained Lakeland's CEO Michael Hanley.

"If a fire breaks out you automatically lose all your product due to smoke or water contamination, so the trick is to prevent a fire breaking out in the first place. In this place you can't even get a cigarette lighter to work," Mr Hanley told the Farming Independent.

The automation saves the company up to 15 'labour units', and will operate day and night handling up to 100,000t of product annually.

Since Lakeland's bought the Pritchard business in 2003, the company has trebled volumes with only a 20pc increase in labour requirements at the Newtownards site.

"All of our food service product will be distributed from this facility, which operates completely differently from our big powder storage facilities in the South. With powder, you are often loading 20t of a single product onto a truck each time.

"With food service, we can be assembling 10 different SKUs (stock-keeping units) onto a single pallet for delivery. So pallets are handled multiple times," he said.

Asked which lines or products were growing fastest for the Border region processor, Mr Hanley was adamant that all lines were growing strongly, "even powders".

"We're shifting about 100,000t of powders annually, and that's going to increase with the commissioning of a new €40m 7t/hr drier on the Bailieborough site next year. But we haven't sold any powders into intervention this year and have no intention of doing so. All our customers are looking for more product," he claimed.

Lakeland's are benefitting from the fact that Russia is not one of the 77 countries that the farmer-owned co-op sells dairy products into, and it has very limited exposure to China.

"In fact our direct sales of UHT milk into China are increasing, but we're not completely insulated from the slow-down there because the companies that make baby powder buy product from us," he said.

With most of the processor's packing machinery "maxed-out", Mr Hanley has already placed an order for another 'milk-stick' packing machine to increase output by 50pc to keep up with demand.

Indo Farming