Gay Lea lays out dairy processing expansion plans

Expansions worth $60M planned for SW Ontario creamery

Gay Lea Foods CEO Michael Barrett (left) and co-operative chairman Steve Dolson. (Gay Lea Foods/Marketwired)

A dairy farmer co-op on an aggressive growth track has mapped out its next four years’ worth of expansions and upgrades, starting with a storied processing plant in southwestern Ontario.

Gay Lea Foods Co-operative on Wednesday announced a budget of $140 million over four years to set up what it describes as an “innovative nutrition and nutraceutical-grade dairy ingredients hub in Canada.”

First on the list is a $60 million expansion for the Mississauga-based co-operative’s creamery at Teeswater, about 100 km northwest of Guelph.

The dairy processing operation that later became known as Teeswater Creamery was established in the area in 1875 and became part of Gay Lea in 1981.

The Teeswater plant saw upgrades and expansions in 2011, backed in part by almost $1 million in provincial funding, to boost its production of milk products and milk protein concentrates for use in products such as infant formula, protein bars and protein drinks, and to serve as an exclusive ingredient supplier for Chapman’s Ice Cream.

The $60 million expansion pledged for the Teeswater plant, to begin early next year, is part of the co-op’s first phase in its multi-year plan, which Gay Lea said will also include upgrades and expansion at its Toronto-area food manufacturing facilities.

The Toronto expansions, the company said, are meant to “increase our capabilities and competitiveness, improving cost efficiencies, while working to reduce our environmental footprint.”

The first phase, Gay Lea said, also commits $3 million to build a new research and development centre of excellence in Hamilton.

The centre, Gay Lea said, will be a “working laboratory and innovation incubator” and “the nexus between R+D and commercialization throughout Gay Lea Foods’ operations, and also service our partners in the dairy, food and health sectors.”

Gay Lea, whose production facilities across Ontario employ about 950 people, has been expanding through acquisitions in recent years, buying Ontario processors Stirling Creamery last month and Black River Cheese in May.

The co-operative last month also announced plans for a new dairy ingredient and butter processing facility in Winnipeg, in a joint venture with Vitalus Nutrition. The venture would also see Gay Lea offer Manitoba dairy farmers the opportunity to join the co-op as member owners.

Gay Lea also recently bought a minority stake in goat’s milk and sheep’s milk processor Mariposa Dairy and expanded its membership to include Ontario dairy goat producers.

Dairy farmer and Gay Lea chairman Steve Dolson said the co-op’s new plan is “driving growth through innovation and the development of new markets that will increase demand for milk from Canadian dairy farms.” — AGCanada.com Network

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