LAKELAND DAIRIES chief executive Michael Hanley expects a new drying facility to pay for itself within 2½ years.

The €20 million non-whey drying facility was officially opened yesterday in Bailieborough, Co Cavan. The largest of its kind in Europe and the most technologically advanced in the State, it will see production at the plant increase to 3.2 million gallons of milk per week from 1.2 million.

Some €12 million of the investment was funded by the co-op, with the State providing the remainder of the funds, primarily through the Government’s dairy grants scheme administered by Enterprise Ireland.

Mr Hanley said the facility would generate major savings, primarily through economies of scale and reduced operating costs.

“This plant will help us improve our long-term competitiveness and strengthen our worldwide market presence, by allowing us to benefit from reduced processing costs and the highest-quality products . . . It will ensure that we yield the maximum value from the markets for every litre of milk sent to us for processing.”

The investment follows a period of consolidation at Lakeland Dairies, which has led to plant closures and job losses.

Opening the facility yesterday, Minister for Agriculture and Food Brendan Smith said the reduction in production costs and increased economies of scale achieved by the operation was “an example of the direction the dairy industry has to go”.

Lakeland Dairies is Ireland’s second-largest dairy co-operative with 2,500 farmers from 15 counties supplying milk to the co-op.