The future of over 40 dairy farms and 100 jobs has been secured after farmers' co-operative First Milk unveiled plans to build a new creamery on the Kintyre peninsula.

It will replace the existing Campbeltown creamery, built in the 1820s as a whisky distillery before being converted to a cheese-manufacturing facility. Despite regular investment the site is now struggling to cope with modern demands.

The new creamery, also in Campbeltown, will have a larger capacity than the existing one and will be funded from three sources: up to £3.9m from the Scottish Government, the sale of First Milk's existing creamery site to Tesco Stores Ltd and funds from First Milk, the UK's leading dairy farmer co-operative.

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At Campbeltown today, Rural Affairs and Environment Secretary Richard Lochhead said:

"This substantial investment is a great boost for the peninsula of Kintyre and the dairy sector. I made it clear at our recent Dairy Summit that we are committed to doing all we can to support the Scottish dairy sector."

Tesco and First Milk will shortly undertake a public consultation process while they work up detailed plans for the new Campbeltown Creamery and new Tesco store.

The planned new Tesco store in Campbeltown would be on the site of the existing Campbeltown Creamery and will replace the current store on Lochend Street, Campbeltown, create over 200 new jobs on top of the 90 people already employed at existing Tesco store and have key environmental features such as natural roof lights and a combined heat and power plant.

(GK/JM)