The co-operative which buys the majority of Pembrokeshire-produced milk has paid an undisclosed sum for a 20% stake in Dairy Crests Haverfordwest cheese-making plant.

The move is expected to result in a £17 million investment in the plant. The Merlins Bridge factory has been re-named Haverfordwest Cheese Limited with immediate effect, following this weeks agreement between First Milk and Dairy Crest.

Dairy farmers have welcomed the partnership because they believe it secures the future of both the factory and the Pembrokeshire milk-production industry.

Farmers in remote counties like Pembrokeshire are vulnerable because of the significant cost of transporting milk to distant processors.

Brian Ratcliffe, chairman of the National Farmers Union, in Pembrokeshire, views the announcement as good news for dairy producers and the factorys 100-plus workers.

Before Christmas, there had been speculation about its future because cheese production was well below its seasonal average. The reason appears to be connected to the collapse of the dried milk powder market.

Expansion could now be on the cards at the Haverfordwest factory because it will become eligible for Objective One cash with its part co-operative status.

Up to 210 million litres of milk will be processed there this year.

Mark Allen, managing director of Dairy Crests cheese operations, says the venture demonstrates the companys commitment to both the plant and the region and describes it as great news for everyone concerned. It secures cheese production and added value product development at the site for the long term, he insists.

His optimism is shared by the chairman of First Milk, John Duncan: This joint venture with Dairy Crest is a tremendously exciting development, not only for Haverfordwest, but also for our members who want to have a greater involvement in milk processing.

Until now, this processing has been limited in West Wales to the Aeron Valley Cheese plant at Felinfach.

Preseli MP Jackie Lawrence has welcomed news of the £17 million investment. I have been aware of the possibilities of this investment for some time, following meetings with Dairy Crest and I am delighted a decision has finally been made. While it may not mean more jobs at the plant, it does show a commitment to its long-term future, she said.

Not only is it good news for the many loyal staff working at the plant, it is also good news for Pembrokeshires farmers. West Wales is one of the foremost dairy producing areas of the UK and this sort of development to add value to local produce is precisely what is needed for the future.