business plan - Guernsey Dairy

Transcription

DAIRY MANAGEMENT BOARD
BUSINESS PLAN
2012 /13
Page | 2
GUERNSEY DAIRY 2012/13 BUSINESS PLAN
COMMENT FROM GUERNSEY DAIRY MANAGEMENT BOARD CHAIRMAN
I am pleased to be able to report another satisfactory performance with the business
delivering a net surplus of £480,000 in 2011 (£405,000 in 2010) alongside a 5%
(£310,000) increase in turnover.
The 16% increase (£190,000) in the value of 2011 Dairy product sales (on top of the
13% increase in 2010) was largely due to the realignment of Guernsey Dairy butter
prices with the prevailing and significantly higher price for butter on the European
market. Currently, Guernsey Dairy butter prices are being maintained at 2011 levels,
but to remain competitive and protect the sales volume price reductions may be
necessary in 2012/13.
The Dairy engaged the services of Foodlink CI Ltd. to assist with the promotion of milkproduct sales during 2011, an approach that did help improve sales and
communications with retail outlets. However it became evident during the year that
further substantive advances in sales would be difficult to achieve at the present time
within the existing supply chain model. Consequently, it was mutually agreed that the
contract with Foodlink-CI Ltd. be suspended pending the final outcome of States
reviews of the industry and its regulation.
Working losses in production were reduced by a further 2% during 2011 (2010 – 6 %).
However, due to the continuing rise in unit cost, energy expenditure increased by 21%
in addition to the 13% rise in 2010. Further substantial increases in energy costs are
already being experienced in 2012.
As in 2009 and 2010, supplies of raw farm milk were maintained at sustainable levels
throughout the 2011 winter period and at no time was there a threat of the need to
import from other jurisdictions. Regular meetings between representatives of the
Guernsey Farmers Association and the Guernsey Dairy over the last few years has
delivered a better understanding of the partnership approach required to obtain
constancy of supply, best quality and value for the local consumer. Revised and
flattened annual quota profiles, which aim to encourage a steady and reliable
supply of raw milk year-round, were implemented on 1 January 2012. Also, revised
‘rules of supply’ delivering improvements in the quality of raw milk supplied to the
Dairy were introduced on 1 April 2012. Planned incremental quality improvements to
the supply of raw milk from farms will lead to better quality products and potentially
longer shelf-life.
Against an encouraging background of progress and growing confidence in the
Guernsey dairy industry, at its meeting in November 2011 the States of Deliberation
decided to note the recommendations of the Independent Dairy Industry Review
Panel which made proposals for the future direction of the Industry. The States
instructed the Commerce and Employment Department to undertake a further
review, reporting back to the States of Deliberation no later than the end of 2013.
That the Dairy was able to produce a financial surplus in 2011 is testament to General
Manager, Andrew Tabel’s determination that, come what may, the Guernsey Dairy is
open for business 365 days of the year. This he achieves with a ‘can do’ attitude, an
optimistic outlook, the support of an extremely loyal team and by leading ‘from the
front’. What more could I ask?
May I take this opportunity to thank Deputies Robert Sillars (resigned Dec 2011),
Martyn Storey and Al Brouard (appointed Dec 2011) for their wisdom, advice and
support during the last States term, and welcome Deputies Mike Hadley and David
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de Lisle newly elected to the Dairy Management Board. Also, my grateful thanks to
Non-States members, Simon Keys and Steve Hogg, for their invaluable contributions,
constantly challenging accepted practice and encouraging the commercial
evolution of the business.
Alan Child
Chairman
Page | 4
THE DAIRY MANAGEMENT BOARD MEMBERS
Chairman
- Alan Child
Commerce & Employment
- Deputy Mike Hadley
Commerce & Employment
- Deputy David de Lisle
Non-States Member
- Simon Keys
Non-States Member
- Steve Hogg
Ex officio
- Andrew Tabel (Dairy General Manager)
Ex officio
- Richard Nash (Director of Client Services)
Note:
The Board’s Financial Management Service is provided by Martyn Smith
(Director of Finance and Resources for the Commerce and Employment
Department)
Page |5
Contents
1. Introduction
1.1.
1.2.
1.3.
1.4.
1.5.
Statement of Purpose
Overview
Operational Context
Principle Activities
Business Strategy
2. Stakeholder Relationship Plan
2.1.
2.2.
2.3.
2.4.
Guernsey Farmers’ Association (GFA)
Guernsey Milk Retailers’ Association (GMRA)
Dairy Trade Counter Customers
Retail trade and commercial Customers
3. Raw Milk Supply Plan
3.1. Volume
3.2. Quality
4. Products and Quality Plan
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
Milk
Cream
Butter
Ice Cream
Cheese
Quality Management Systems Review
5. Sales and Marketing Plan
5.1. Local Market Sales
5.2. Export Sales
5.3. Product Pricing
6. Business and Operations Plan
6.1.
6.2.
6.3.
6.4.
Business Outcomes
Operational Review
Management and Administration Structure Review
Business Continuity and Security Review
7. Capital Investment Plan
8. Appendices
8.1. Dairy Trading Account 2011 and Probable Outturn 2012
8.2. Dairy Sales Projections 2012
8.3. Capital Investment Programme 2012-2016
8.4. Dairy Organisational Chart (May 2012)
8.5. Dairy Business Plan 2012/13 Summary of Activities
9. Figures
9.1. Raw milk supply graph (2006 – 2012)
9.2. Export (retail) butter sales
9.3. % ‘split of the retail price of milk
9.4. Product contribution to annual sales
9.5. Percentage split in milk sales by product type
9.6. Percentage split in milk sales by milk type
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1.
INTRODUCTION
1.1.
Statement of Purpose
1.2.

To provide a modern processing unit for the local dairy industry, that
supplies a range of high quality dairy products for local and export
markets.

To satisfy the local demand for processed fresh Guernsey milk at an
acceptable price to the consumer

To operate commercially within the context of government
intervention designed to maintain Guernsey’s traditional countryside.
Overview
Guernsey Dairy performs a vital milk processing and marketing role, operating at
the interface between the raw milk producers (Guernsey’s dairy farmers) and the
people of Guernsey, as customers. The Milk and Milk Products (Guernsey) Law 1955
(as amended) instituted what is effectively a States monopoly over the supply of
liquid milk on the Island. The prevention of imports in this way has acted as a key
factor in protecting the Island’s dairy farming industry and preserving the unique
nature of the Guernsey countryside.
1.3.
Operational Context
Guernsey Dairy aims to manufacture, market, and sell commercially viable, high
quality and high value dairy produce, operating an effective and efficient raw milk
processing facility to UK national standards of hygiene and safety.
Whilst the Dairy’s terms of reference include operating as commercially as
possible and challenging accepted practice, the following restraints to operational
efficiency currently apply:

Island milk production is controlled (and effectively capped at 8.1
million litres per year) through the Dairy Supply Contract and quota
system.

All raw milk produced (to agreed quality standards) must be
purchased from the suppliers regardless of the Dairy’s need.

Raw milk is purchased, and processed milk is sold at prices set by
others.

Until 2015, area monopoly licences apply to the distribution of all
processed milk and doorstep deliveries of dairy products.

The remuneration and conditions of service directives for all public
sector employees apply to Dairy staff. The Dairy Management Board
has no control over the pay or employment conditions of its own
workforce.
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1.4.
Principle Activities
The principal activities of the Guernsey Dairy are:
1.5.

Collecting raw milk from farms.

Processing raw milk to produce milk, cream, butter, cheese, and ice
cream for retail and catering sale.

Operating agreed systems to pay farmers for milk collected.

Supplying milk and other dairy products to customers.

Ensuring that all milk collection and production activities are carried
out in accordance with best practice and UK accepted food hygiene
and safety standards.

Ensuring that developments in the UK food and drink industry are
closely monitored and beneficial methods appropriate to the
Guernsey Dairy are adopted.
Business Strategy
 The Dairy aims to provide a modern processing unit for the local dairy
industry, that supplies a range of high quality dairy products for local
and export markets.
 The Dairy seeks to satisfy the local demand for processed fresh
Guernsey milk and to operate in a commercial manner within the
context of government intervention designed to maintain Guernsey’s
traditional countryside.
 The Dairy will focus on sales and their enhancement.
 The Dairy’s product range will be kept under review (including the
market testing of new products) and the fully absorbed manufacturing
costs of each product will be accurately determined.
 At all times, the Dairy will be operated to ensure a hygienic and safe
working environment is maintained.
This will be pursued with
investment in staff, in training, equipment, and facilities.
 The Dairy will continue to work with a specialist dairy industry Quality
Assurance consultancy, to ensure that the Dairy achieves quality
standards in line with the UK industry and that efficiencies are
maximised, shelf life is increased, and products are produced to the
highest quality standards.
 Investment in facilities and equipment will continue, self financed from
any operating surpluses generated using a ‘save to spend’ policy. A
comprehensive Investment Plan has been developed, and continues
to be implemented.
 The Dairy is committed to maintaining good communications with all of
its stakeholders. This will include a twice-yearly “In-Council” meeting
and regular operational dialogue.
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 The Dairy will work closely with milk distributors to investigate sales
incentives for retail products, promotions, and marketing. Sales
performance will be monitored and the Dairy will optimise its strategy
for sales in the light of these investigations.
 The Dairy is keen to work with local dairy farmers prepared to produce
raw milk over and above their quota allowance. This could result in the
Dairy being able to supply all of the Island’s liquid milk requirements
and in turn alleviate the need for raw or processed milk imports and
the associated threat to the Island’s dairy industry this may carry.
 A steady improvement in raw milk intake quality will be pursued in
collaboration with Island dairy farmers to ensure quality, improved
product shelf life, reduction of operational losses, and an adequate
year round intake to satisfy demand is maintained.
 Export sales of butter remain important to the Dairy and its financial
performance and will continue to be supported by ensuring a regular
supply of product is maintained. The Dairy will also act to ensure that
the local retail butter market is similarly maintained.
 Significant operational improvements have been made through
revised working practices leading to the reduction of milk losses in the
business. The Dairy will continue to look for operational cost savings
and will consider amongst other things reducing the length of the
effective working week taking into consideration the result of a full
product review.
 A review of the management and administration structure of the Dairy
will be conducted to determine the most efficient staffing model
required to sustain the Dairy’s needs.
 The Dairy will review its operation annually and this will form the basis of
its business plan (which will be made public in its entirety) and of its
submission to the Milk Price Review Panel. The latter will propose price
changes to provide an Annual Business Outcome showing a surplus for
re-investment in the region of 5% of turnover.
 The Dairy will seek to play its part and have a strong role in ensuring
that Island consumers are aware of the benefits that accrue from
making the choice to continue to buy local dairy products over
imported alternatives.
Page |9
2.
STAKEHOLDER RELATIONSHIP PLAN
2.1.
Guernsey Farmers’ Association (GFA)
Key to the future success of the Guernsey Dairy Industry is the relationship
between the GFA as a representative body, of the Island dairy farmers, and the
Guernsey Dairy. Meetings are now held on a regular basis with the aim of involving
GFA members in a partnership approach to the development of the local dairy
industry.
2.1.1. Activity
Regular meetings continue to be held between Dairy management and GFA
representatives to work together to: 
improve the quantity and quality of the raw milk produced from the
Guernsey breed of cattle

obtain a good match between the Dairy’s requirement for raw milk
(demand curve) and the supply pattern throughout the year, and

explore ways of improving the efficiency of the industry and the operation
of the Dairy, to the benefit of all stakeholders and customers.
(Notes of the meetings are circulated to participants and to members of the Dairy
Management Board for information)
When
Monthly
Who
Chairman, General Manager and Quality Assurance Manager
2.2.
Guernsey Milk Retailers’ Association (GMRA)
Until 2015 licensed milk distributors are guaranteed a territory based monopoly
over the distribution of all Guernsey Dairy retail packaged milk and for the doorstep
sales of Guernsey Dairy retail products. It is therefore important for the Dairy to work
with the GMRA to maximise these sales.
Dairy senior management will continue to meet GMRA representatives regularly
to discuss operational matters associated with supply and distribution issues.
2.2.1. Activity
Regular meetings will continue be held between Dairy management and GMRA
representatives to explore ways of working together to:
maximise the sales of milk and dairy products in Guernsey

explore ways of improving the service to local customers and

discuss operational issues associated with demand, supply and delivery.
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(Notes of the meetings will be circulated to participants and to members of the
Dairy Management Board for information)
When
Monthly
Who
Chairman, General Manager, Quality Assurance Manager, and Production
Manager
2.3.
Trade Counter Customers
There are currently 17 ‘active’ customers who hold a Trade Account with the
Guernsey Dairy. Collectively their turnover in 2011 was circ. £235k which represents
approximately 3.5 % of the Dairy’s annual turnover.
Trade account customers currently have access to the following milk products
produced by the Guernsey Dairy subject to availability:

Catering butter (salted and unsalted) – currently unavailable

Catering cream (whipping and double)

The full range of ice-cream (catering and retail)
There are also (subject to conditions) bulk discounts for catering cream and butter
that are available to all Dairy customers. The thresholds are currently:

Catering salted butter – minimum order of 500 kg’s

Catering unsalted butter – minimum order quantity of 250 kg’s

Catering cream – minimum order quantity of 100 litres per week (across the
entire range)
2.3.1.
Activity
The trade counter scheme will be kept under review with the aim of maximising
Guernsey Dairy’s local market share of dairy product sales.
The particular focus in 2012/13 will be –

product availability

ordering schedules and units of sale/bulk discount thresholds

increasing the awareness and use of locally produced dairy products
When
Continuous
Who
General Manager
P a g e | 11
2.4.
Retail Trade and Commercial Customers
The Dairy’s products are distributed to Island consumers via a system based
around the requirements of twenty-six individual businesses that form the GMRA.
Feedback from customers within the multiple retail outlet sector of the market has
long been that they would be better able to support and stock local Guernsey Dairy
products if they could speak directly to the Dairy; in particular to discuss matters such
as promotional activity and POS advertising.
In 2010/11 a Sales and Marketing Adviser was retained on a part-time temporary
contract to develop links and build sales through improved communication and
promotion across all Guernsey Dairy products. Substantial progress was achieved
during 2010/11, but it was recognised that substantive further advances in sales would
be difficult to achieve within the existing supply chain model. With the Board’s
reluctance to pursue changes to the supply chain model in advance of a decision
expected from the States of Deliberation on the Industry review the contract was
mutually suspended and is unlikely to be re-instated before further consideration of
the issues by the States in 2013. Meanwhile sales and marketing activity is limited to
what is achievable within the resources available ‘in house’ combined with those of
the GMRA.
2.4.1.
Activity
To ensure that wherever possible the placement of Guernsey Dairy products on
shop shelves is in a prominent position.
When
Throughout 2012/13
Who
General Manager and GMRA Representatives
2.4.2.
Activity
To engage in the process of in-store sampling to help raise the profile of the
Guernsey Dairy, increase sales and brand loyalty
When
Throughout 2012/13
Who
2.4.3.
Activity
To engage in the process of in-store promotional activity to help raise the profile
of the Guernsey Dairy, increase sales and brand loyalty
When
Throughout 2012/13
Who
Page | 12
3.
RAW MILK SUPPLY PLAN
3.1.
Volume
As in 2011, a key issue for the Dairy (See Fig 1 “Raw Milk intake 2006-2012”), is the
seasonal variation of raw milk supply throughout the year. Whilst this is to a degree
unavoidable, of particular concern have been the periods of low production in the
winter. The Dairy Farm quota arrangements have not given sufficient incentive to
date to avoid the need to import raw milk to make up for seasonal under production
in some years. The Dairy has discussed this at length with the GFA and is pleased to
note that production held up in the winter of 2010/2011, and again in 2011/2012.
Similar changes to those made during the previous year were re-introduced with the
suspension of “B” price, i.e. by raising the “B” price to the “A” price level for raw milk
produced during the period January to March 2012. The Dairy will review the matter
and may well re-instate this arrangement for further trialing in the winter 2012/2013.
The Dairy will continue to work with the Commerce and Employment Department
(C&E) on the details of the ‘milk quota system’ by offering incentives for winter milk
production to ensure continuity of supply is maintained.
C&E through consultation with the GFA, have introduced a modified quota line that
applies to all farms which aims to match farm output requirements to the even year
round pattern of the consumption of liquid milk.
3.1.1.
Activity
Review the experience of a raised “B” price with the GFA in stimulating winter
milk production. Consultation on any further changes will take place with the Industry.
When
Ongoing throughout 2012/13
Who
Chairman, General Manager
3.1.2.
Activity
Review the outcomes of the introduced changes to the monthly milk quota profile
(in conjunction with C&E) with the aim of more closely aligning raw milk production to
demand, reducing seasonal variations in raw milk supply, and minimising the risk of
under supply in the winter months. Consultation on any further changes will take
place with the Industry.
When
Who
P a g e | 13
3.2.
Milk Quality
The quality of the raw milk produced on the island remains high but ongoing
improvement will be required in order to reach the levels afforded to some processors
of premium branded fresh milk in the UK. Increase in raw milk quality will not only
provide opportunities for extending the shelf life on milk and cream, but will also
enable the review of operational efficiencies.
Following an extended period of consultation between the Guernsey Dairy and
the GFA, a revised ‘Rules of Supply’ initiative was introduced in April ’12. This will
continue to be discussed as part of the Dairy/GFA Operational meetings and
reviewed more formally on an annual basis with a view of improving raw milk quality
received by the Dairy.
Bacterial quality and antibiotic contamination of raw milk are issues that affect
the Dairy, potentially raising costs, jeopardising product shelf life, and threatening
continuity of local supply.
However, the volumes of milk lost due to contamination by antibiotics, and/or
extraneous water entrainment are relatively low. Losses over the last 6 years being:Year
2007
2008
2009
2010
2011
2012
Litres
9,920
14,792
13,488
4,878
8,933
9,901 (to 15 June 2012)
When contamination is identified in the Dairy’s milk tanker during pre-acceptance
tests the volume lost is greater, as it is not only the offending farm’s milk that is
contaminated, but also milk from the other farms making up that collection round.
3.2.1.
Activity
An annual review of the ‘Rules of Supply’ to be undertaken with any changes
being part of a thorough consultation process with the GFA and an agreed
implementation plan.
When
Who
Chairman, General Manager, Quality Assurance Manager (with independent
consultancy advice from Food Industry Consultancy Services (FICS)), GFA
Representatives.
Page | 14
4.
PRODUCTS & QUALITY PLAN
4.1. Milk
Liquid milk sales continue to account for 80.05 % of annual sales turnover by value
(Fig. 4) and the total volume of liquid milk sold has remained reasonably static over
the last 10 years. In line with the long-term trend, skimmed milk sales continue to
increase although there has been a general overall reduction in half-litre milk sales as
the consumer recognises the difference in price when buying a half-litre carton of
milk as opposed to a litre. Note: The price of half litres reflects the higher operational
costs of producing, packing, and handling half-litre cartons.
The percentage stakeholder split in the retail price of milk (currently 105 ppl) is
shown in Fig. 3. Sales of milk per product type is shown in Fig. 5. and by milk type in Fig.
6.
4.1.1.
Activity
Milk sales in 2012 are expected to reflect those of recent years with a continuing
trend towards lower fat products and a general steady decline in liquid milk sales
amounting to approximately 50,000 litres (0.85%) over the past 5 years. The Dairy will
monitor the commercial expediency of continuing to manufacture a half-litre fullcream product and alternative approaches to production processing to reduce its
costs, whilst maintaining acceptable use-by dates.
When
Who
General Manager, Quality Assurance Manager, Production Manager
4.1.2.
Activity
Obtain revenue from the sale of advertising space on milk cartons.
When
Who
4.1.3.
Activity
investigate the feasibility of cross-advertising with other island businesses for
mutual benefit and to boost revenue from this income stream.
When
Who
Page | 15
4.1.4.
Activity
As part of a brand preference campaign, create, develop, and use a ‘story
board’ on milk cartons based around the five key areas associated with the Island’s
dairy industry to fill any gaps in advertising runs.





Environment
Breed
Dairy
Producer
Health benefits
When
Who
Chairman, General Manager, PR Advisor
4.2. Cream
Year on year, catering cream sales decreased in volume by 6.4% (5,072 litres) with
retail cream sales showing an increase of 3.61 % (1,443 litres). Overall, cream sales
decreased by 3.04 % (3,630 litres) across this sector of the business.
4.2.1.
Activity
The Dairy will continue to work with the GMRA and trade counter customers to
increase the awareness and benefits of supporting locally produced cream products
in order to gain an increased share of local market sales.
When
Ongoing throughout the year
Who
Chairman, General Manager, and GMRA Representatives.
4.2.2.
Activity
Targeted promotional activities to be supported using the assistance of the GMRA
in conjunction with major retail outlets on the island.
When
Who
Page | 16
4.2.3.
Activity
Work to continue with the catering section of the CoFE on the training of young
chefs in the use of Guernsey cream rather than cream substitutes.
When
Who
4.3. Butter
July 2011 saw the European and UK butter commodity price reach
unprecedented levels of £3,800 per tonne. The Guernsey Dairy adjusted its gate
prices across all existing product lines in August 2011 to reflect the shift in the market
price, which also had the impact of reducing the demand as the Retail Sale Price
was realigned with competing products. This ensured that retail product availability
locally was restored following several weeks of interrupted supply despite the
withdrawal of the catering product line in November 2010 to allow the business to
concentrate on the more financially rewarding retail sector.
UK butter exports (marketed and sold in Guernsey Dairy branded retail wrap)
showed an increase of 11.25 % (6,745 Kg’s - Fig. 2). This remains a lucrative and
valuable export market for the business, which raises the profile of the Guernsey Dairy
(and the Island) as a producer of premium quality, high value, niche market dairy
produce. The Dairy will again support and build on its relationship with this sector of
the market throughout 2012/13.
Overall, reflective of the withdrawal of the catering product line, total butter
sales were down 4.18 % (9,341 Kg’s) v 2010, but income was up.
4.3.1.
Activity
The Dairy will offer and run targeted price promotions as necessary to increase
sales working with its distribution network and commercial customers both locally and
in the export sector of the market.
Guernsey Dairy will continue to work with UK export customers to ensure
continuation of existing supply contracts.
When
Who
General Manager
4.3.2.
Activity
Continue to work with DEFRA to establish some form of accreditation relating to
the initial Protected Designation of Origin application for Guernsey Dairy butter or
possibly a Protected Geographical Indication.
Page | 17
When
December 2012
Who
General Manager, Quality Assurance Manager, and States of Guernsey
Agriculture Advisor
4.3.3.
Activity
Ensure the correct positioning of Guernsey Dairy butter (local and export) by
evaluating each sector of the market to enable the business to benefit from the high
value premium branding associated with its products.
When
Continuing throughout 2012/13
Who
General Manager
4.4. Ice-cream
Guernsey Dairy ice-cream is available via the GMRA and the Trade Counter and
thus available to any customer of the Guernsey Dairy with the appropriate form of
refrigerated storage/transport.
Ice-cream sales by volume show an increase of 2.64 % (4,239 litres) in 2011
compared to 2010 despite some changes to the product listing being made i.e. some
flavours withdrawn and gate prices increased across all remaining product lines. This
helped to re-establish the margins (against the FAMC’s) and align the prices against
competing products. 2011 also saw the introduction of new 2-litre packaging and
labelling which better reflected the quality of the contents for products aimed at the
retail sector of the market. Consequently, 2-litre retail ice-cream sales saw an uplift of
4.81 % (1,612 litres) in 2011 against those of 2010.
Despite a delay in obtaining the re-branded packaging from our Supplier (which
resulted in a June launch) 100 ml ice-cream sales in 2011 exceeded those from the
previous year, up 56.92 %. The Dairy forged close links with Muse Ltd. who operated a
Guernsey Dairy/Muse branded mobile ice-cream vending tricycle at key locations
around St. Peter Port, has no doubt contributed to these successes.
2011 sales of the catering ice-cream range remain on a par with those in 2010 (0.3 % or 196 litres).
Total ice-cream sales reflect an increase of 2.64 % (4,239 litres).
Sales and marketing activity will continue throughout the year to include:





Streamline/improve ordering arrangements for shops
Impulse purchase fridges in selected outlets
Point of sale displays
Proactive contacts with local wholesalers
In-store sampling
Review of packaging and pack sizes (catering and retail)
Page | 18

4.4.1.
Continue to develop relationships with third party ice-cream re-sellers
Activity
Continue to work with prospective partners to raise the profile of Guernsey Dairy
ice-cream at key sites across the island.
When
Who
General Manager
4.4.2.
Activity
Investigate and evaluate the catering and retail sectors for Guernsey Dairy icecream with a view to repositioning the gate (and consequently the Retail Sale Price)
against competitor’s products, the pack sizes and range of flavours – subject to Dairy
Management Board approval.
When
December 2012
Who
General Manager
4.4.3. Activity
Investigate the feasibility of introducing a one-litre luxury ice-cream range either
in conjunction with, or as an alternative to, the current two-litre retail range.
When
December 2012
Who
General Manager, Quality Assurance Manager
4.5. Cheese
Frie d’Or, the first soft cheese to be developed by the Guernsey Dairy, was
launched in 2008 in partnership with Meadow Court Farm who assisted with the initial
marketing and promotion. Smoked cheese was also re-introduced after an absence
of 3 years (in both retail and catering packs). There has been a continuation of small
batches of specialist “flavoured” cheeses targeted for release at specific times of the
year i.e. Christmas, and seasonal Farmers markets, but these account for a marginal
percentage of total sales.
With “working losses” still being managed effectively (2011 saw a reduction of 8.56
% or 30,187 litres compared to the previous year) and with strong raw milk production
from the island’s dairy farmers, excess milk, i.e. that which is above and beyond what
Page | 19
is required for liquid milk sales, continues to be readily available – particularly during
the ‘Spring flush’. Overall, cheese production in 2011 saw a reduction of 21.2 %
(11,369 Kg’s) from the unprecedented ‘high’ experienced in 2010. Cheese
production in 2012 has already surpassed that of 2011 and reflects that of 2010.
Competition in this sector of the market remains intense, with major brand leaders
engaging in ongoing promotional activity throughout the year. The Guernsey Dairy
countered this by running several ‘blanket’ promotions of their own across both
product ranges i.e. catering and retail. Despite this, 15,170 Kg’s of cheese was
exported to the UK due to it nearing its maximum maturation point, and the inherent
risk of ‘spoiling’. This was the legacy of the Dairy having to accept over 8.24 million
litres of raw milk in 2010 (the highest volume recorded since the introduction of Milk
Quota’s in 2000) and consequently having to absorb the surplus milk by turning it into
cheese.
In addition, 2011 saw the Dairy sell 18,792 Kg’s (an increase of 37.07 % on 2010) of
cheese to the Food Service industry where it is used for grating. This gave the Dairy a
slightly better return on its initial investment compared to exporting it onto the bulk
export market. The continuation of this activity highlights the risks shouldered by the
Dairy and the continuing need for a level supply pattern of liquid milk.
Retail cheese sales saw a slight decline of 0.77 % (116 Kg’s) in overall sales with
local catering block bucking the trend by comparison by showing an increase of
24.94 % (844.37 Kg’s).
Total cheese sales (by volume) show an increase in sales of 57.77 % (19,898 Kg’s)
although 26.96 % (15,170 Kg’s) of this was consigned to the bulk export market, which
due to the high price the Dairy pays for its raw milk doesn’t offer a positive return on
the initial investment.
4.5.1.
Activity
The Guernsey Dairy will continue to work with the GMRA, trade counter
customers, and retail outlets to market Guernsey Dairy cheeses. Specifically, the
Dairy will endeavour to:




Improve point of sale and general awareness
Improve the presence of Guernsey Dairy cheeses on deli-counters
Develop and promote, at a modest level, the Dairy’s range of flavoured
speciality cheeses
Undertake in-store sampling
Support the sampling and use of Guernsey Dairy cheeses at high profile local
events
The Guernsey Dairy will also promote Guernsey Dairy cheeses by attending
events such as “Taste Guernsey” and cheese and wine tasting events organised by
local wine merchants.
When
Who
General Manager, Production Manager, Cheese production team
Page | 20
4.5.2.
Activity
Investigate the feasibility of introducing an artisan cheese e.g. waxed coated, to
compliment the Dairy’s existing product range
When
December 2012
Who
General Manager, Production Manager, Cheese production team
4.5.3.
Activity
Conduct a feasibility study of the cost/benefit in continuing the production of Frie
d’Or cheese and the price-point it retails for in the local market place taking into
consideration the Fully Absorbed Manufacturing Costs (FAMC).
When
December 2012
Who
General Manager, Production Manager
4.5.4.
Activity
Review the packaging and gas mixtures used on the retail range of Dairy
cheeses in order to increase their visibility against the competition.
When
December 2012
Who
General Manager, Chief Engineer, Production Manager, Quality Assurance
Manager
4.6. Quality Management Systems Review
The Guernsey Dairy was audited by Environmental Health Department in April
2011 and retained the appropriate EU food manufacturing standard accreditation.
The date of the 2012 audit is yet to be confirmed.
Waitrose, prior to setting up its retail operation in Guernsey, audited the business
as a supplier of milk and milk-products – which was successfully completed. Third
party accreditation (endorsed by Waitrose and used by many of their existing
suppliers) in the form of Small And Local Supplier Accreditation (SALSA) was obtained
in October 2011. This ensures the Dairy’s Quality Management System is ‘fit for
purpose’ and further enhances our long-standing relationship with a key customer
account, both on and off the Island.
The Guernsey Dairy underwent a formal pre-audit visit from the Food Safety
Consortium who are subcontracted by Marks and Spencer to manage their Food
Safety Plan.
Page | 21
The annual audit by the Soil Association to enable the Guernsey Dairy to be
licensed to process and pack Organic milk is scheduled to take place on 23 June
2012.
4.6.1. Activity
Guernsey Dairy’s food industry advisor, FICS, will continue to train the Guernsey
Dairy Hazard Analysis Critical Control Point (HACCP) team to Level 1, & 3 (HACCP for
manufacturing).
When
Level 1 training to be completed by August 2012.
Level 3 training for the Quality Assurance Manager to be completed by May 2012
HACCP Team Members to complete training to Level 3 by December 2012
Who
Quality Assurance Manager (with consultancy advice from FICS)
4.6.2. Activity
Guernsey Dairy will continue to work with FICS to ensure that the Dairy achieves
quality standards in line with the UK industry and that efficiencies are maximised, shelf
life results are monitored, and products are of the highest quality within the
manufacturing and production processes.
When
Annual trends will be monitored and reviewed quarterly
Who
4.6.3.
Activity
Review the current Laboratory microbiological testing procedures and establish
whether they still fulfil the needs of the business or whether alternative and more
responsive testing methods are available.
When
This is the subject of continuous review and auditing principles – ongoing
throughout 2012/13
Who
4.6.4.
Activity
Maintain the Dairy’s compliance to the SALSA and Soil Association standards
When
This is the subject of continuous review and auditing principles – ongoing
throughout 2012/13
Who
Page | 22
5. SALES & MARKETING PLAN
5.1. Local Market Sales
The sale of Guernsey Dairy products into the local retail market produces the
highest net worth of sales in the business. Marketing will therefore concentrate on
gaining a higher percentage of the available local dairy market.
5.1.1.
Activity
Establish what percentage of the market share the Guernsey Dairy has in each
sector of the market.
When
Who
General Manager, (with input from the GMRA and local Retail Outlets)
5.1.2.
Activity
Create a catering sales brochure aimed at raising the Dairy’s brand
profile/preference by informing local Chef’s of the full range of Guernsey Dairy milk
and milk-products available from their local Dairy
When
June 2012
Who
Chairman, General Manager, GMRA Representatives
5.1.3.
Activity
Develop a similar concept to the catering brochure specifically aimed at
‘Doorstep’ customers, or those who currently don’t get their milk delivered.
When
July 2012
Who
Chairman, General Manager, GMRA Representatives
5.2. Export Sales
The Dairy’s main export over recent years has been the sale of retail butter to a
major retail multiple based in the UK (Fig. 2). This continues to be an ideal market for
the Guernsey Dairy as the supply and demand relationship is harmonised.
Cheese also has potential for exports but the market is extremely competitive for
an undifferentiated product. Guernsey ‘Cheddar’ is a traditional, farmhouse type of
Page | 23
cheddar cheese along with the manufacturing process and maturation/storage
techniques, whilst ‘fit for purpose’, it is considered not to be of artisan style. Finding a
high value niche market along with a satisfactory, cost-effective route to market is
essential, but continues to remain elusive despite recognition in the form of a Gold
medal for the Dairy’s oak-smoked cheddar at the 2011 Nantwich International
Cheese Show.
5.2.1.
Activity
Marketing opportunities for one-off export sales of excess butter - stocks will be
actively monitored and supply/demand profiles taken into consideration ensuring
that the business achieves the best possible return on its investment.
When
Ongoing
Who
General Manager
5.2.2.
Activity
Opportunities for export markets for cheese will continue to be investigated.
When
Ongoing
Who
General Manager
5.3. Product Pricing
The FAMC project is complete, but will be continuously monitored and updated
throughout the course of the year.
5.3.1.
Activity
The FAMC of Guernsey Dairy products will be regularly monitored and price
changes to products will be implemented taking into account variations in FLHP,
packaging/labour costs and prices of competitive products in the same sector of the
market.
When
Ongoing
Who
Chairman, General Manager and Chief Engineer
5.3.2. Activity
The Guernsey Dairy will undertake periodic benchmarking reviews on
competitors’ products.
When
Throughout 2012/13
Who
General Manager
Page | 24
6. BUSINESS AND OPERATIONS PLAN
6.1. Business Outcomes
The trading accounts for the year ended 31 December 2011 together with the
2012 Probable Outturn are attached as Appendix 1. See also Appendix 2 for sales
projections
6.1.1.
Activity
The Dairy will make a submission to the Milk Price Review Panel (MPRP), which
aims to provide an Annual Business outcome showing an operating surplus in the
region of 5% of turnover.
When
July 2012
Who
Chairman, DMB Members, General Manager, Financial Service Provider (C&E)
6.1.2.
Activity
As part of the MPRP submission, the Dairy will request that it is given the financial
resources to enable it to adopt the most efficient financial model of funding
infrastructure investment from savings, in a similar manner permitted by other States
Trading Boards i.e. save to spend.
When
June 2012
Who
Chairman, DMB Members, General Manager, Financial Service Provider (C&E)
6.2. Operational Review
Significant operational improvements were made during 2010/11 through revised
working practices leading to the reduction of milk losses across the business. Although
work will continue to reduce losses even further, it is likely that any additional savings
in this area will be small compared with those already achieved. Additional
operational savings may be attainable through reviewing production schedules, the
range of products manufactured, and significant capital investment in automated
systems.
The Guernsey Dairy is mindful of the outcome from the Policy Council’s
Independent Review of the Islands dairy industry and the direction given to the
Commerce and Employment Dept. by the States of Deliberation (November 2011). It
is anticipated that the latest review will commence mid-2012 with a deadline of
appearing before the States in December 2013. No major initiatives will be launched
by the Guernsey Dairy until the review’s findings are known, and have been formally
considered.
Page | 25
6.2.1.
Activity
Draft and supply information for the review of the Island’s dairy industry
When
Continuous throughout 2012/13 as part of the consultation process
Who
6.2.2.
Activity
Review current ordering schedules and units of sale for all milk and milk-products
When
Who
Chairman, General Manager, Production Manager, Quality Assurance Manager
6.2.3.
Activity
Review the existing layout of the Dairy’s production and storage capacity to
ensure that the facility is ‘fit for purpose’.
When
December 2012
Who
General Manager, Chief Engineer, Quality Assurance Manager, Production Manager
6.3. Management and Administration Structure Review
The human resources needed to provide an efficient commercial operation,
including succession planning for key roles, will be determined largely by the
implementation of ‘SAP’ and the effectiveness of the ‘Shared Transaction Service
Centre’ which forms part of a wider Policy Council strategic initiative to reduce costs
across the whole of the SofG. It remains to be seen how involved the Guernsey Dairy
(as a Trading Board generating and supporting its own business activities) will
become and to what extent some commercial freedom and autonomy will be
offered.
A review of the Dairy’s organisational structure (management, staff, and
administration personnel) will be considered to enable the business to provide the
most efficient staffing model required to sustain the Dairy’s needs. In the interim, Dairy
staffing will be maintained at a level commensurate with providing a safe, rewarding,
and hygienic working environment based on existing constraints.
Page | 26
6.3.1.
Activity
Review the organisational structure of the business taking into consideration the
above comments and the outcome of the introduction of the Systems Application
and Products (SAP) based States accounting system as part of the wider Shared
Transaction Service Centre (STSC).
When
Following the implementation of ‘SAP’, the considered views of C&E’s review of the
dairy industry, and the conclusion of product and operational reviews.
Who
Chairman, General Manager, and Staff representatives
The current establishment of the Guernsey Dairy is shown in Appendix 4.
6.4. Business Continuity & Security Review
Three threats to business continuity exist which are difficult to plan for, namely the importation of processed milk into the Island uncontrolled by the Dairy, the
inability of the local dairy farming community to supply sufficient raw milk over a
sustained period of time, and the inability of the Guernsey Dairy to function because
of some unforeseen catastrophic incident.
6.4.1.
Activity
The Dairy will identify and monitor the known and most likely of risks and threats to
business continuity and endeavour to plan accordingly.
When
Who
Chairman, General Manager, Chief Engineer, Quality Assurance Manager (with
consultancy support from FICS), Production Manager, Health Safety and Risk
Management Group (HSRMG).
6.4.2.
Activity
Review the Dairy’s ‘IT Risk Strategy’ and establish a Service Level Agreement with
Central ITU in order to provide the required IT support that will equal or exceed the
Dairy’s requirements.
When
Who
General Manager, Chief Engineer, Representatives from C&E and Central ITU.
6.4.3.
Activity
Investigate the cost/benefit of undertaking a sustained ‘brand preference/brand
loyalty’ initiative – subject to DMB approval.
Page | 27
When
September 2012
Who
Chairman, General Manager, PR Advisor
Page | 28
7. CAPITAL INVESTMENT PLAN
7.1. Capital Investment
A shortage of funding generated from a negative operating surplus and
uncertainties over future finances resulted in a lack of investment in facilities and
equipment between 2002 and 2008. Having thoroughly reviewed the needs of the
business a comprehensive Capital Investment Plan (attached as Appendix 8.3) has
been developed. Improved financial performance has greatly assisted the Dairy in
establishing a capital investment fund limited to its trading activities and consistent
with the States’ “save to spend” policy.
Two significant items of dairy equipment were ordered in 2010 with the milk
packaging machine (£361,500) arriving in the island in early December, although this
wasn’t commissioned and fully operational until 2011. The replacement butter packer
(£199,950) arrived on site in September but was found to have sustained extensive
damage in transit and was subsequently returned to the Supplier. This delayed the
installation/commissioning by several months and production on the replacement
equipment didn’t commence until May 2011. The impact of this meant that 2011 saw
the total capital expenditure of £866,918 against a previous year’s total of £131,247.
Several smaller projects were also completed in 2011 along with routine remedial
repairs/maintenance work being carried out to the fabric of the building and existing
systems. Work included a significant upgrade to the Dairy’s SCADA system (£103,069),
the replacement of the ice-bank pumps/pipe-work (£32,260), new storage racking in
the cheese maturation store (£24,975), and the rewiring of one of the Dairy’s main
control panels (£17,111).
During the course of 2012, several capital projects are planned with the
replacement/repair of several key areas around the facility as the deterioration of
systems and services installed during the 1989/1990 refurbishment show signs of
degenerative wear and tear. The effects of a major failure could have a direct
impact on the Dairy’s ability to process liquid milk, leading at best to an interruption to
the supply chain, and at worst, the threat of milk imports.
Other CAPEX items such as the Laboratory refurbishment and upgrades to the
Dairy’s SCADA system - which will afford the business enhanced control over milk
processing and CIP systems (by the addition of automation/integration and a
reduction in ‘manual processes’) will ensure that the business moves forward,
engages in ‘industry standard practices’, and that the facility remains ‘fit for purpose’.
A projected CAPEX figure of £783,150 has been put in place for 2012 with a further
£752,000 scheduled for 2013.
7.1.1.
Activity
The rolling Capital Investment Plan will be implemented as indicated over the
coming years and will be determined by a system of prioritisation whilst taking into
consideration available funding on a “save to spend” policy.
When
Continuous throughout 2012/13 (Appendix 3)
Who
Chairman, DMB, General Manager, Chief Engineer
Page | 29
8. APPENDICES
8.1
8.2
8.3
8.4
8.5
Dairy Trading Account 2011 & Probable Outturn 2012
Dairy Sales Projections
Capital Investment Programme 2012 – 2016
Dairy Organisational Chart (May 2012)
Dairy Business Plan 2012 – Summary of Activities
9. Figs
9.1
9.2
9.3
9.4
9.5
9.6
Raw milk supply graph (2006 – 2012)
Export (retail) butter sales
% ‘split of the retail price of milk
Product contribution (as a percentage) to annual sales
Percentage split in milk sales by product type
Percentage milk sales by milk type
Page | 30
Appendix 8.1 - Dairy Trading Account 2011 and Probable Outturn 2012
Dairy Revenue account for the year ended 31 December 2011
£
Sales
Liquid milk
Dairy products
2011
£
2010
£
£
5,308,348
1,352,128
27,208
5,177,090
1,164,800
36,375
6,687,684
6,378,265
Sundry income
Total sales
Cost of sales
Opening product stock
Opening packaging stock
Production wages
Milk
Milk – working losses
Dairy product ingredients
Packaging materials
Carriage inwards
Offshore processing and freight
Sundries
Closing product stock
Closing packaging stock
273,061
168,734
766,298
3,136,597
129,717
42,391
494,361
14,291
46,941
0
(251,122)
(155,932)
441,795
258,978
145,338
404,316
4,630,596
747,770
3,065,740
136,889
36,060
523,504
15,121
34,015
111
4,559,210
(407,054)
(273,061)
(168,734)
(441,795)
Total cost of sales
4,665,337
4,521,731
Gross surplus
2,022,347
1,856,534
Administration expenses
(1,566,930)
(1,455,830)
455,417
400,704
Operating surplus for the year
Interest receivable
Gain on sale of fixed assets
Retained surplus for the year
8,924
17,756
3,992
60
£ 482,097
£ 404,756
All material activities derive from continuing operations.
There are no recognised gains or losses or other movements in reserves for the
current or preceding financial years, other than as stated in the revenue account.
Page | 31
Balance sheet at 31 December 2011
2011
2010
£
£
Tangible fixed assets
2,221,787
1,538,804
Current assets
Stocks
Debtors and prepayments
Balances held with the States Treasury
Cash at bank and in hand
472,314
1,040,033
839,799
131,800
506,854
1,274,271
332,935
618,107
2,483,946
2,732,167
Creditors: amounts falling due within
one year
Net current assets
(418,710)
(466,045)
2,065,236
2,266,122
Total net assets
£4,287,023
£3,804,926
Reserves
£4,287,023
£3,804,926
Page | 32
Cash flow statement for the year ended 31 December 2011
2011
£
Net cash inflow from operating
activities
2010
£
£
£
855,901
188,710
8,924
3,992
Returns on investments and
servicing of finance
Interest received
Capital expenditure
Payments to acquire tangible
fixed assets
Receipts from sales of tangible
fixed assets
Net cash outflow from capital
expenditure
(846,918)
(131,247)
2,651
60
(844,267)
(131,187)
(Increase) /decrease in assets
held with States Treasury
(506,864)
200,550
(Decrease) / increase in cash
(£ 486,306)
£ 262,065
Management of liquid resources
Page | 33
Capital expenditure 2010/2011
Capital expenditure
Plant & Machinery
Fan Convector Heaters for Heated Carton Store
Hot Water Calorifier
PS70 Filling Manifold
Refrigeration Equipment Unit for Cold Store 5
Refrigeration Equipment for Cheese Maturation Room
Milk Collection Systems
Milk Tanker Data Capture System
C.I.P. Up Grade to Cream Tank Controls
C.I.P. Pipe-Work
Semi Automatic Churn Washer
Ice Bank System Pipe-Work & Pumps
Scalox/Prime Delivery Pipe-Work
Scada Upgrade of Milk & Cream Pasteuriser
Shokoku S-PS60 Milk Packaging Machine
Brine Injector Pump
Rotary End Ford Butter Packaging Machine
LMS Cooled Brie Incubator
Two Ice Cream Scooping Freezers
MCC2 Electrical Control Panels
Cheese Maturation Store Racking
2011
2010
£
£
2,836
24,500
32,260
6,628
103,069
361,500
2,510
199,950
3,381
4,340
17,111
24,975
2,769
1,920
842
6,925
6,925
4,742
22,489
14,635
-
780
-
-
1,584
2,022
22,923
2,694
6,212
6,170
2,811
36,914
29,383
4,677
45
17,264
-
523
1,212
4,780
1,625
339
814
1,616
9,470
-
£866,918
£131,247
Site & Roads
Repairs to Tarmac
Buildings
Laboratory Storeroom Refurbishment
Aluminium Doors
Guttering & Fascias
Tanker Office Refurbishment
Loading Bay Refurbishment
Resurface Floor in Cold Store 5
Motor Vehicles
Forklift Truck
Isuzu Rodeo Denver 4x4 Pickup Truck
Diesel Tank for Road Vehicles
Tanker Chassis
Road Tanker, Tank & Pump Cabinet
Road Tanker Pump
Other Office Equipment (F&F)
HP Compaq 8000 Elite PC + Work Station
Upgrade to SCADA System Software
Electronic Safe
HP Laser Jet P4014DN Printer
Storage & Segregation Racking
HP USDT Computer, VDU & Cabling
Oak Desk, Pedestal & Chair
Shockproof Laptop
Total Capital expenditure
Page | 34
Dairy probable outturn
For the year ended 31 December 2012
2012
£
£
Sales
Liquid milk
Dairy products
Sundry income
5,456,100
1,299,000
20,000
Total sales
6,775,100
Cost of sales
Production wages
Milk
Milk – working losses
Dairy product ingredients
Packaging materials
Freight
775,000
3,384,800
137,300
36,500
483,000
4,000
Total cost of sales
4,880,600
Gross surplus
1,894,500
Expenses
Advertising & promotion
Cleaning materials
Depreciation
Fuel, light, power, water, rates
General administration costs
Laboratory expenses
Motor vehicle expenses
Other expenses including carriage
Professional fees
Repairs, maintenance, insurance
Salaries and wages
Total expenses
Operating surplus for the year
Interest receivable
Retained surplus for the year
62,000
63,000
215,000
366,000
21,500
81,000
20,500
69,500
71,500
123,500
567,000
1,660,500
234,000
18,000
£ 252,000
Page | 35
Appendix 8.2 - Projected Sales 2012 (by volume)
Sales weeks 1-52
Product Line
2011
2011
2012
2012
Literage/weight
Percentage
Difference
Actual Unit Sales
Literage/weight
Projected Sales
Low Fat ½ Litre
Units
468,918
234,459
454,454
227,227
-3.08%
Low Fat Litre
Units
4,140,526
4,140,526
4,101,336
4,101,336
-0.95%
-6.00%
Low Fat Pergal
Units
18,891
256,918
17,758
241,509
Full Cream ½ Litre
Units
134,254
67,127
127,213
63,607
-5.24%
Full Cream Litre
Units
629,459
629,459
622,435
622,435
-1.12%
Organic Low Fat ½ Litre
Units
69,794
34,897
59,899
29,950
-14.18%
Full Cream Pergal
Units
699
9,506
1,233
16,769
76.39%
Skimmed ½ Litre
Units
193,236
96,618
180,863
90,432
-6.40%
Skimmed Litre
Units
1,070,245
1,070,245
1,115,251
1,115,251
4.21%
Projected 2012 Total Milk Sales (litres)
Litres
6,508,514
-0.48%
6,539,755
Double Cream 142ml
Units
65,927
9,362
66,345
9,421
0.63%
Double Cream 284ml
Units
90,811
25,790
92,895
26,382
2.29%
Whipping Cream 142ml
Units
16,506
2,344
16,519
2,346
0.08%
Extra Thick Cream 284ml
Units
13,850
3,933
14,101
4,005
1.81%
Total Retail Cream Sales (litres)
Litres
42,154
1.75%
Whipping Cream ½ Pot
Units
1,522
1,729
1,236
1,404
-18.79%
Whipping Cream Pot
Units
3,025
6,873
2,625
5,964
-13.22%
Double Cream ½ Pot
Units
2,560
2,908
2,423
2,753
-5.35%
Double Cream Pot
Units
3,553
8,072
3,628
8,243
2.11%
Bulk Discounted Double Cream ½ Pot
Units
1,612
1,831
1,420
1,613
-11.91%
Bulk Discounted Double Cream Pot
Units
11,789
26,785
12,180
27,673
3.32%
Bulk Discounted Whipping Cream ½ Pot
Units
1,902
2,161
1,926
2,188
1.26%
10,505
23,867
11,749
26,694
11.84%
41,429
Bulk Discounted Whipping Cream Pot
Units
Total Catering Cream Sales (litres)
Litres
74,226
76,531
3.11%
Projected 2012 Total Cream Sales (catering + retail)
(lit )Portions (x200)
Butter
Litres
115,655
118,685
2.62%
Units
4,483
6,276
3,949
5,529
-11.91%
Salted Butter (250g)
Units
373,117
93,279
393,727
98,432
5.52%
Unsalted Butter (250g)
Units
85,459
21,365
86,624
21,656
1.36%
Bulk Butter (10kg) Salted
Units
178
1,780
215
2,150
20.79%
Bulk Butter (10kg) Unsalted
Units
224
2,240
130
1,300
-41.96%
Catering Salted Butter 250g (<499kg)
Units
0
0
0
0
0.00%
Catering Unsalted Butter 250g (<249 kg)
Units
0
0
0
0
0.00%
Discounted Catering Salted Butter 250g (>500 kg)
Units
2,800
700
0
0
-100.00%
Discounted Catering Unsalted Butter 250g (>250 kg)
Units
4,480
1,120
0
0
-100.00%
Bulk Butter (25kg) Salted
Units
832
20,800
434
10,850
-47.84%
Bulk Butter (25kg) Unsalted
Units
1
25
0
0
-100.00%
Export Sales (20 x 250g cases)
Units
13,343
66,715
12,256
Projected 2012 Total Butter Sales (kg's)
KG's
214,300
61,280
-8.15%
201,196
-6.11%
Mild Cheddar Block (kg)
Units
1,966
1,966
3,193
3,193
62.41%
Mild Cheddar Block (local grating) (kg)
Units
18,792
18,792
26,824
26,824
42.75%
Mild Cheddar Block (export) (Kg)
Units
11,507
11,507
0
0
-100.00%
Mature Cheddar Block (kg)
Units
1,466
1,466
1,418
1,418
-3.25%
Mature Cheddar Block (export) (Kg)
Units
2,886
2,886
0
0
-100.00%
Extra-mature Cheddar Block (kg)
Units
798
798
397
397
-50.25%
Extra-mature Cheddar Block (export) (Kg)
Units
777
777
0
0
-100.00%
12.73%
Smoked Cheddar Block (kg)
Units
1,107
1,107
1,248
1,248
Frie d'Or 200g
Units
1,532
306
1,638
328
6.92%
Mild Cheddar 240g
Units
30,730
7,375
23,719
5,693
-22.81%
-6.64%
Mature Cheddar 240g
Units
23,794
5,711
22,215
5,332
Smoked Cheddar 240g
Units
2,172
521
2,197
527
1.15%
Extra Mature 240g
Units
4,719
1,133
4,792
1,150
1.55%
Projected 2012 Total Cheese Sales (kg's)
KG's
46,109
-15.15%
Fresh Cream
100
6,326
633
5,490
549
-13.22%
Strawberry and Cream
100
3,379
338
3,498
350
3.52%
Chocolate
100
2,750
275
2,958
296
7.56%
25.84%
54,344
Honeycomb
Total sales (units)
100
3,568
357
4,490
449
Litres
16,023
1,602
16,436
1,644
2.58%
Vanilla
2 litre
6,228
12,456
6,743
13,486
8.27%
Strawberry
2 litre
1,685
3,370
1,541
3,082
-8.55%
Chocolate
2 litre
2,028
4,056
2,146
4,292
5.82%
Toffee
2 litre
1,431
2,862
1,231
2,462
-13.98%
Coconut
2 litre
1,217
2,434
1,042
2,084
-14.38%
Coffee
2 litre
1,158
2,316
1,166
2,332
0.69%
Mint Choc Chip
2 litre
2,535
5,070
2,682
5,364
5.80%
Rum and Raisin
Total sales (units)
2 litre
1,292
2,584
1,159
2,318
-10.29%
Litres
17,574
35,148
17,710
35,420
0.77%
Vanilla
4 litre
9,489
37,956
7,209
28,836
-24.03%
Strawberry
4 litre
2,781
11,124
2,193
8,772
-21.14%
Chocolate
Total sales (units)
4 litre
2,577
10,308
2,290
9,160
-11.14%
Units
14,847
59,388
11,692
46,768
-21.25%
Luxury Vanilla
4.7 litre
126
592
130
611
3.17%
Strawberries and Cream
4.7 litre
145
682
165
776
13.79%
Rich Chocolate Chunk
4.7 litre
126
592
128
602
1.59%
Honeycomb Crunch
4.7 litre
180
846
196
921
8.89%
7.28%
Total sales (units)
Herm Vanilla
Units
577
2,712
619
2,909
10 litre
291
2,910
300
3,000
3.09%
Herm Vanilla
4.7 litre
210
987
326
1,532
55.24%
Total sales (units)
Units
501
3,897
626
4,532
16.30%
Projected 2012 Total Ice-cream sales (litres)
KG's
100,035
88,364
-11.67%
Guernsey Raw Intake
Litres
8,105,940
8,159,000
0.65%
Working Losses
Litres
322,541
299,481
-7.15%
Page|36
Appendix 8.3 - Proposed Capex (30 May 2012)
2009
Priority
Status
Unique
Capex
Project
Code
Office
equip.
Plant &
machinery
Site, roads
and
buildings
0
0
2500
0
0
0
5000
0
0
0
0
0
12000
£0
0
30000
0
0
0
£0
0
30000
0
0
0
8
£0
0
0
0
5000
0
May
10
£0
0
0
0
0
5000
5000
Category for budget
Est. Cost
Month of
purchase
Complete Butter date coder
Plant and machinery
£2,500
Jan
5
£0
0
Complete Spare inverter for Separator
Plant and machinery
£5,000
Jan
3
£0
0
Site, roads and buildings
£12,000
April
10
£0
Complete Tanker Chassis (1)
Motor vehicles
£30,000
April
5
Complete Tanker Chassis (2)
Motor vehicles
£30,000
April
5
Plant and machinery
£5,000
May
Complete Check Office Refurbishment
£5,000
Complete Improved racking and storage facilities (2)
Status
Project / Asset description
Complete Refurbishment of Eng. Workshop (Phase 1)
Complete Replacement of Condensor Unit (CS1)
Useful Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
£5,000
June
10
£0
0
0
0
0
Complete Pasteuriser raw milk pump replacement
Plant and machinery
£4,000
Jan
5
£0
0
0
0
4000
0
Complete Delivery pumps CIP
Plant and machinery
£3,850
April
5
£0
0
0
0
3850
0
Complete Inverters for delivery pumps
Plant and machinery
£800
August
5
£0
0
0
0
800
0
Motor vehicles
£30,000
July
15
£0
0
30000
0
0
0
Complete Milk Tanker Vessel (1)
Complete New PC (Chief Engineer)
Office equipment
£900
September
3
£0
0
0
900
0
0
Motor vehicles
£30,000
November
15
£0
0
30000
0
0
0
Plant and machinery
£78,800
September
10
£0
0
0
0
78800
0
Office equipment
£4,250
November
3
£0
0
0
4250
0
0
Complete Replacement of condensor unit in CS 2
Plant and machinery
£17,500
October
5
£0
0
0
0
17500
0
Plant and machinery
£7,500
November
5
£0
0
0
0
7500
0
Plant and machinery
£10,000
November
5
£0
0
0
0
10000
0
Complete Replacement Air Compressor
Plant and machinery
£14,000
November
5
£0
0
0
0
14000
0
Complete Replacement Air Dryer (Compressor)
Plant and machinery
£2,500
November
5
£0
0
0
0
2500
0
Office equipment
£1,200
December
3
£0
0
0
1200
0
0
0
Complete Milk Tanker Vessel (2)
(1-10)
Expenditure by Category
Complete Butter Packer (40% deposit)
Complete Photocopier
Complete New PC's * 2 (PS)
Complete New PC's * 2 (PM & Utility Desk)
Complete Replacement Forklift Truck
Complete Convert existing store into new Cold Store
Complete Milk Crates
Office equipment
£1,800
December
3
£0
0
0
1800
0
Plant and machinery
£16,500
December
5
£0
0
0
0
16500
0
£27,500
November
15
£0
0
0
0
0
27500
Plant and machinery
£12,500
October
5
£0
0
0
0
12500
0
Complete Replacement of the Dairy's file servers (1)
Office equipment
£5,000
November
5
£0
0
0
5000
0
0
Complete Software for the servers
Office equipment
£2,000
December
3
£0
0
0
2000
0
0
Plant and machinery
£12,000
December
5
£0
0
0
0
12000
0
Complete Cream Ink Jet Coder
Complete Printer for Check Office
Office equipment
£580
December
3
£0
0
0
580
0
0
Complete Lab Chemical Storage
Laboratory equipment
£1,530
December
10
£0
1530
0
0
0
0
£0
£1,530
£120,000
£15,730
£192,450
£49,500
CAPEX
£379,210
2010
Priority
Status
Unique
Capex
Project
Code
Status
Category for budget
Est. Cost
Month of
purchase
Useful
Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
Office
equip.
Plant &
machinery
Site, roads
and
buildings
Complete Ice-cream crates
Plant and machinery
£7,500
Jan
5
£0
0
0
0
7500
0
Complete Dairy Van (small)
Motor vehicles
£17,000
Jan
5
£0
0
17000
0
0
0
Complete Tanker Office refurbishment
£3,000
Jan
10
£0
0
0
0
0
3000
3
3-10
£7,500
May
5
£0
0
0
0
0
7500
4
5-10
Complete Replacement of condensor unit in cheese maturation room
£7,500
May
5
£0
0
0
0
0
7500
2=
6-10
Complete Replacement Milk Packaging machine (50%)
Plant and machinery
£175,000
May
10
£0
0
0
0
175000
0
£3,000
February
10
£0
0
0
0
0
3000
Complete Replacement Admin block door & Tanker Office
7-10
Complete Heated Carton Store--Heating System Upgrade
Plant and machinery
£3,500
February
5
£0
0
0
0
3500
0
1=
1-10
Complete Butter Packer (40% 'intermediate payment')
Plant and machinery
£98,500
June
10
£0
0
0
0
98500
0
8
8-10
Complete Incoming Raw Milk Meter-Printer
Plant and machinery
£5,000
June
5
£0
0
0
0
5000
0
7
9-10
Complete Replace floor in CS 5 (H & S concerns)
£8,000
May
20
£0
0
0
0
0
8000
11-10
Complete Replacement Fascia and Guttering
£22,500
March
15
£0
0
0
0
0
22500
5
12-10
Complete CIP System Delivery Flow meter
Plant and machinery
£5,000
April
5
£0
0
0
0
5000
0
13
13-10
Complete Repairs to Dairy yard (Loading Bay and drainage ref. RA)
£6,500
May
10
£0
0
0
0
0
6500
6=
19-10(A)
17
17
9
16-10
14-10
2=
18-10
6=
19-10(B)
2=
6-10
18
22-10
Complete No.2 PS70 Filler Pneumatics
Plant and machinery
£4,000
April
5
£0
0
0
0
4000
0
Complete Improvements to existing CIP system (valve & pump replacement etc.) P1 SCADA.
Plant and machinery
£8,000
July
5
£0
0
0
0
8000
0
Complete Dairy hot w ater calorifier
Plant and machinery
£2,000
August
5
£0
0
0
0
2000
0
Complete Road Tankers Data-capture system
Plant and machinery
£20,000
June
5
£0
0
0
0
20000
0
0
Complete Downline Handling (milk packaging)-Carton Conveyors (1)
Plant and machinery
£50,000
October
5
£0
0
0
0
50000
Complete Improvements to existing CIP system (valve & pump replacement etc.) P2.
Plant and machinery
£15,000
October
5
£0
0
0
0
15000
0
Complete Replacement Milk Packaging machine (50%)
Plant and machinery
£175,000
November
10
£0
0
0
0
175000
0
£1,500
November
3
Complete Replacement PC's (QAM & GM)
CAPEX
Office equipment
£645,000
£0
0
0
1500
0
0
£0
£0
£17,000
£1,500
£568,500
£58,000
Page|37
Page|38
2011
Priority
Status
Unique
Capex
Project
Code
1
1-11
Completed Replacement of Tanker 28 (Chassis)
2
2-11
Completed CIP Pipe-work replacement (Phase 1)
3=
3-11=
Completed MCC2 Electrical Control Panel (Phase 1 - initial survey)
21-10
21-10
29-11
Status
Month of
purchase
Useful Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
Plant &
machinery
Site, roads
and
buildings
0
0
0
0
3500
0
0
6500
0
Office
equip.
Category for budget
Est. Cost
Motor vehicles
£37,000
July
5
£0
0
37000
Plant and machinery
£3,500
February
15
£0
0
0
Plant and machinery
£6,500
June
20
£0
0
0
Completed Repairs and upgrade to ice-bank system (Phase 1)
Plant and machinery
£15,200
August
5
£0
0
0
0
15200
0
Completed Repairs and upgrade to ice-bank system (Phase 2)
Plant and machinery
£22,800
September
5
£0
0
0
0
22800
0
0
Completed Replacement Churn Washer
Plant and machinery
£24,500
July
10
£0
0
0
0
24500
6
6-11
Completed Seperator and Pasteuriser controls onto SCADA (Phase 1 - Review)
Plant and machinery
£1,000
June
10
£0
0
0
0
1000
0
6
6-11
Completed Seperator and Pasteuriser controls onto SCADA (Phase 2)
Plant and machinery
£34,000
October
10
£0
0
0
0
34000
0
7
6-11
Plant and machinery
£15,000
November
10
£0
0
0
0
15000
0
8
6-11
Plant and machinery
£53,000
December
10
£0
0
0
0
53000
0
8
8-11
Completed Butter brine injection pump
Plant and machinery
£3,500
March
10
£0
0
0
0
3500
0
1-10
Completed Butter Packer (10% 'final payment')
Plant and machinery
£31,700
June
10
£0
0
0
0
31700
0
26-11
Completed Replacement Safe (Admin Office)
29-11
Completed Replacement (road) Diesel tank
30-11
Completed Temperature controlled maturation storage unit for Frie d'Or
31-11
Completed 2 x branded scooping ice-cream freezers
12
12-11
Completed Exterior painting of structural steelwork (Fire Escape)
13
13-11
11
25-11
14
14-11
15
15-11
Cancelled Refurbishment of Eng. Workshop (phase 2)
Completed Repairs to Dairy Yard
C/F
Exterior Dairy painting (general)
Completed Replacement printers (Admin Office and Production Office)
C/F
£550
April
5
£0
0
0
550
0
0
£2,900
August
10
£0
0
0
0
0
2900
Plant and machinery
£3,600
September
5
£0
0
0
0
3600
0
Plant and machinery
£4,500
August
3
£0
0
0
0
4500
0
£10,000
September
5
£0
0
0
0
0
10000
£0
December
10
£0
0
0
0
0
0
£1,000
July
10
£0
0
0
0
0
1000
£0
September
5
£0
0
0
0
0
0
Office equipment
£900
August
3
£0
0
0
900
0
0
15
15-11
Plant and machinery
£0
October
10
£0
0
0
0
0
0
23=
23-11
Completed Cheese store racking (25% deposit with order)
£6,250
May
10
£0
0
0
0
0
6250
32-11
Completed Misc. Storage and segregation racking
£5,000
September
15
£0
0
0
0
0
5000
3=
3-11=
Completed MCC2 Electrical Control Panel (Phase 2 electrical installation)
Plant and machinery
£18,000
October
20
£0
0
0
0
18000
0
17
17-11
£0
September
10
£0
0
0
0
0
0
18
18-11
Completed Replacement of Tanker 28 (incl. s/s storage vessel)
Motor vehicles
£35,000
August
10
£0
0
35000
0
0
0
23=
23-11
Completed Cheese store racking (75% on completion)
£18,750
August
10
£0
0
0
0
0
18750
34-11
Completed Scalox/prime delivery pipework
Plant and machinery
£5,000
November
10
£0
0
0
0
5000
0
36-11
Completed Replacement tanker pump
Plant and machinery
£5,000
November
5
£0
0
0
0
5000
0
20
35-11
Completed High Spec.' Laptop for SCADA control back up
Office equipment
£1,500
November
3
£0
0
0
1500
0
0
20
32-11
Completed Boiler control - hot well level control
Plant and machinery
£1,500
December
10
£0
0
0
0
1500
0
20
33-11
Completed Cabling, PC and office furnture for Dry Goods store
Office equipment
£2,500
October
5
£0
0
0
2500
0
0
20
37-11
On hold
Office equipment
£0
December
10
£0
0
0
0
0
0
21
21-11
WIP
Butter - cream metering pump
23
28-11
WIP
Upgrade Dairy/Site Security (Alarms etc.)
WIP
Repairs to FMT 2
Office equipment
Lab refurbishment
MRP Software
CAPEX
Plant and machinery
£5,000
October
5
£0
0
0
0
5000
0
£25,000
November
10
£0
0
0
0
0
25000
£0
£0
£72,000
£5,450
£253,300
£68,900
£399,650
2012
Carried Forward From Previous Year
Priority
Status
Unique
Capex
Project
Code
Status
4-11
Meter for Butter Cream to CT7
14-11
Exterior Dairy painting (general)
15-11
Repairs to FMT 2
17-11
WIP
37-11
On hold
Lab refurbishment
MRP Softw are (pending SAP review)
Est. Cost
Month of
purchase
Plant and machinery
£4,000
January
£10,000
Category for budget
Useful
Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
Office
equip.
Plant &
machinery
Site, roads
and
buildings
5
£0
0
0
0
4000
0
5
£0
0
0
0
0
10000
Plant and machinery
£3,000
10
£0
0
0
0
3000
0
£50,000
December
10
£0
0
0
0
0
50000
Office equipment
£0
December
10
£0
0
0
0
0
0
Plant and machinery
£5,000
October
5
£0
0
0
0
5000
0
General Dairy tiling (ad-hoc repairs)
£30,000
10
£0
0
0
0
0
30000
Reflooring CS 1 and 2
£35,000
10
£0
0
0
0
0
35000
19-11
Replace CIP room floor
£50,000
September
10
£0
0
0
0
0
50000
24-11
Butter cream tank (5,000 litre)
Plant and machinery
£18,800
December
5
£0
0
0
0
18800
0
0
21-11
Butter - cream metering pump
16-11
22-11
13-12
Completed Jetstream 850 Foam Spray Unit
Plant and machinery
£1,000
January
10
£0
0
0
0
1000
14-12
Completed Fork mounted drum grab
Plant and machinery
£750
February
5
£0
0
0
0
750
0
15-12
Completed Drum pallet loader
Plant and machinery
£850
February
5
£0
0
0
0
850
0
16-12
WIP
4-12
21-12
23-12
Lone Worker Alarm system for CS 1
£2,500
February
5
£0
0
0
0
0
2500
Refurbishment of Eng. Workshop (Phase 3)
£12,000
April
10
£0
0
0
0
0
12000
Plant and machinery
£2,500
April
5
£0
0
0
0
2500
0
£10,000
May
10
£0
0
0
0
0
10000
Completed Scope out future SCADA w orks and obtain quote/specification
WIP
Racking in 'Daily Use' store
24-12
WIP
Replace Dairy signage in line w ith current legislation
1-12
On Order
17-12
On Order
20-12
SCADA linked to CS5, 6, 7, I/C freezer (both) and blast freezer (thick cream)
5-12
£4,000
July
10
£0
0
0
0
4000
0
£6,500
April
10
£0
0
0
0
0
6500
Electronic Pasteuriser controls on Organic Milk processing plant
Plant and machinery
£11,000
May
10
£0
0
0
0
11000
0
Automation of raw milk intake silo's
Plant and machinery
£25,000
May
10
£0
0
0
0
25000
0
£25,000
September
5
£0
0
0
0
0
25000
Preparation/Paint cream platform steelwork
25-12
29-12
Plant and machinery
WIP
Admin Office redecoration
£6,500
October
5
£0
0
0
0
0
6500
Repair and paint exterior steelwork (Ice-bank support roof structure)
£18,000
July
10
£0
0
0
0
0
18000
0
Plant and machinery
£0
September
10
£0
0
0
0
0
26-12
Refurbishment of butter-maker cannon
Plant and machinery
£95,000
September
10
£0
0
0
0
95000
0
27-12
Cream Pasteuriser balance tank
Plant and machinery
£2,500
October
10
£0
0
0
0
2500
0
22-12
Replace steam supply pipew ork to Garage block
£25,000
September
10
£0
0
0
0
0
25000
10-12
Mix-proof valves and SCADA control software
Plant and machinery
£175,000
October
10
£0
0
0
0
175000
0
Pasteuriser automation (linked to SCADA)
Plant and machinery
£100,000
November
10
£0
0
0
0
100000
0
11-12
Cancelled Auger Drive on butter making equipment
8-12
18-12
On Order
19-12
30-12
Cream Pasteuriser: cream pump and drive system
Insulate w arm carton store/new doors and heating system
On Order
Upgrade flow transmitters on the Al-fast
CAPEX
Plant and machinery
£6,000
June
5
£0
0
0
0
6000
0
£25,000
September
10
£0
0
0
0
0
25000
Plant and machinery
£23,250
July
10
£783,150
£0
0
0
0
23250
0
£0
0
0
0
0
0
£0
£0
£0
£0
£477,650
£305,500
Page|39
Page|40
2013
Priority
Status
Unique
Capex
Project
Code
Status
11-11
C/F
3-12
C/F
6-12
C/F
Month of
purchase
Useful Residual
Life (yrs)
Value
Office
equip.
Plant &
machinery
Site, roads
and
buildings
0
0
0
50000
0
0
0
7500
0
0
0
0
15000
50000
Laboratory Motor
equipment vehicles
Category for budget
Est. Cost
Resurface Dairy yard (phase 1)
£50,000
£0
0
Coldstore 1-4 lighting
£7,500
£0
0
Reflooring CS 3
£15,000
£0
2-12
C/F
£50,000
£0
0
0
0
0
28-12
C/F
Butter cream tank loading cells
Plant and machinery
£3,000
£0
0
0
0
3000
0
12-12
C/F
Main corridor retiling/wall covering (1)
£35,000
£0
0
0
0
0
35000
9-12
C/F
General Dairy tiling (milk packaging)
£50,000
£0
0
0
0
0
50000
£5,000
Jan
5
£0
5000
0
0
0
0
Re-floor cheese maturation room
£20,000
Jan
5
£0
0
0
0
0
20000
Fit out 'Upper Store' re-lay floor and dry-line w alls and ceiling
£45,000
Jan
Decorate and fit out Board/meeting room
£10,000
Ice-cream filler head 1 and 2 litre
Plant and machinery
£60,000
Milk Packaging machines linked to CIP system
Plant and machinery
£30,000
February
Replacement Milk Packaging machine 2 (50%)
Plant and machinery
£185,000
March
Installation of Class 2 Cabinet
7-12
C/F
Ice-cream data coding
Plant and machinery
£10,000
Refurbishment of Eng. Workshop (Phase 4)
£12,000
April
General Dairy tiling/repair
5
£0
0
0
0
0
45000
10
£0
0
0
0
0
10000
5
£0
0
0
0
60000
0
5
£0
0
0
0
30000
0
25
£0
0
0
0
185000
0
10
£0
0
0
0
10000
0
10
£0
0
0
0
0
12000
£50,000
November
10
£0
0
0
0
0
50000
Replacement Milk Packaging machine 2 (50%)
Plant and machinery
£185,000
October
25
£0
0
0
0
185000
0
Downline Handling (milk packaging) - Carton Conveyor (2)
Plant and machinery
£50,000
October
10
£0
0
0
0
50000
0
Reflooring CS 4
£15,000
October
10
£0
0
0
0
0
15000
Re-roof Cheese Maturation and CS 6 roof
July
£35,000
20
£0
0
0
0
0
35000
SCADA - automation of silo routing valves and pipework changes
Plant and machinery
£60,000
10
£0
0
0
0
60000
0
Butter-maker vacuum pump
Plant and machinery
£5,000
5
£0
0
0
0
5000
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
£5,000
£0
£0
£588,000
£394,500
CAPEX
£752,000
2014
Priority
Status
Unique
Capex
Project
Code
Status
Month of
purchase
Office
equip.
Plant &
machinery
Site, roads
and
buildings
0
0
35000
0
0
0
8000
0
0
0
0
0
0
0
0
0
50000
0
0
0
0
35000
£0
0
0
0
17500
0
£0
0
0
0
0
50000
0
0
17500
0
20000
0
0
0
50000
0
0
0
50000
0
0
0
35000
0
0
0
50000
0
0
195000
0
0
0
25000
0
0
0
0
30000
0
0
0
0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
£50,000
£0
£0
£300,500
£367,500
Useful
Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
Category for budget
Est. Cost
Organic Milk Processing Equipment
Plant and machinery
£35,000
Jan
10
£0
0
Improvements to CIP system
Plant and machinery
£8,000
March
5
£0
0
£50,000
March
5
£0
50000
£50,000
June
10
£0
General Dairy tiling (ex CICL room)
£35,000
November
10
£0
Plant and machinery
£17,500
December
5
General Dairy tiling (cheese room)
£50,000
December
10
Relocate Server room
£17,500
10
£0
0
0
Plant and machinery
£20,000
10
£0
0
0
General Dairy tiling (Milk Control & cream platform)
£50,000
10
£0
0
0
Dairy tiling (CIP room w alls)
£50,000
10
£0
0
Main corridor retiling/wall covering (2)
£35,000
10
£0
0
Refloor Corridor
£50,000
10
£0
0
SCADA - automation of cream routing vlaves and pipe-work
Plant and machinery
£195,000
10
£0
0
Cheese wrapping press
Plant and machinery
£25,000
5
£0
0
£30,000
25
£0
0
£0
0
£0
MicroFoss machine
Milk Crates and pallets
Catering cream data coding
Replace main water supply pipew ork
CAPEX
£718,000
Page|41
Page|42
2015
Priority
Status
Unique
Capex
Project
Code
Status
Replace steam boilers
Category for budget
Est. Cost
Month of
purchase
Useful
Residual
Life (yrs)
Value
Laboratory Motor
equipment vehicles
Office
equip.
Plant &
machinery
Site, roads
and
buildings
Plant and machinery
£150,000
15
£0
0
0
0
150000
0
Resurface Dairy yard (phase 4) and relay drainage channels
£50,000
20
£0
0
0
0
0
50000
Relocate cream into ex-CICL room
£325,000
20
£0
0
0
0
0
325000
Replace C.I.P system valve matrix
Plant and machinery
£95,000
10
£0
0
0
0
95000
0
Peplace milk downline handling (carton coveyor)
Plant and machinery
£60,000
10
£0
0
0
0
60000
0
Water supply pump (mains w ater)
Plant and machinery
£12,500
25
£0
0
0
0
12500
0
Replace date coders - milk packaging
Plant and machinery
£25,000
10
£0
0
0
0
25000
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
£0
£0
£0
£342,500
£375,000
CAPEX
£717,500
2016
Priority
Status
Unique
Capex
Project
Code
Status
Month of
purchase
Office
equip.
Plant &
machinery
Site, roads
and
buildings
40000
0
0
0
40000
0
0
0
0
0
0
50000
0
£0
0
0
0
45000
0
£0
0
20000
0
0
0
Useful
Residual
Life (yrs)
Value
Laboratory
Motor
equipment vehicles
Category for budget
Est. Cost
Dairy tanker chassis (1)
Motor vehicles
£40,000
5
£0
0
Dairy tanker chassis (2)
Motor vehicles
£40,000
5
£0
0
C.I.P System (automate acid wash)
Plant and machinery
£50,000
10
£0
Milk Packaging (replace crate stacker)
Plant and machinery
£45,000
10
Motor vehicles
£20,000
5
Replace Nexon Forklift
Integrate Milk Packaging C.I.P onto SCADA
Plant and machinery
£18,000
10
£0
0
0
0
18000
0
Replace cream-packer equipment
Plant and machinery
£125,000
10
£0
0
0
0
125000
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
0
0
0
0
0
£0
£0
£100,000
£0
£238,000
£0
CAPEX
£338,000
Page|43
Page|44
Dairy Management Board
Martyn Smith (Director of Finances and Resources)
Alan Child (Chairman)
Dep. David De Lilsle
Dep. Mike Hadley
Simon Keys and Steve Hogg (non‐Political members)
Sharon Clancy
Appendix 8.4 – Guernsey Dairy
Organisational Chart (June ‘12)
Richard Nash and Andrew Tabel (ex‐officio)
Finance Officer (C&E)
General Manager:
Andrew Tabel
Admin Team:
Wendy Guille (P/T)
Wendy Anthony (P/T)
Chief Engineer:
Production Manager:
Quality Assurance Manager:
Ian Ferbrache
David Domaille
Melanie Roe
Peter Cameron (P/T)
Anthea Inder
Engineering Team:
Laboratory Team:
Alan Pike (P/T)
Michelle Rouillard
Brian Roberts
Adrian Craker
John Blackwell (P/T Temp)
Production Supervisor:
Production Supervisor:
Paul Domaille
Rob Bougourd
Production Team:
Paul Gallienne David Rich
Graham Holberry Ricky Lawrence
Colin Rabey Paul Renouf
Bob Brown Kieran Queripel (Saturday's only)
Grenville Devonshire (Temp) Ben Parsons (Temp)
Production Team:
Darren Hooper
Paul Queripel
Kieran Skillet (Storeman) Peter Anderson
John Mitchell
Steve Parsons
Craig Lanyon
Peter Le Goupillot
Michael Chick (Temp)
Tom Inder Mark Bott Diane Batiste
Anna Cleal
Appendix 8.5 – Dairy Business Plan 2012/13 Summary of Activities
[Number of planned activities in each area is shown in brackets]
Section 2 - Stakeholder Relationship Plan (6)
Section 3 - Raw Milk Supply Plan (3)
Section 4 – Products & Quality Plan (21)
4.1
4.2
4.3
4.4
4.5
4.6
Milk (4)
Cream (3)
Butter (3)
Ice-cream (3)
Cheese (4)
Quality Management Systems Review (4)
Section 5 – Sales & Marketing Plan (7)
5.1
5.2
5.3
Local Market Sales (3)
Export Market Sales (2)
Product Pricing (2)
Section 6 – Business & Operations Plan (8)
6.1
6.2
6.3
6.4
Business Outcomes (2)
Operational Review (3)
Management & Administration Structure (1)
Business Continuity & Security Review (3)
Section 7 – Capital Investment Plan (1)
Page|45
Page|46
Plan
2. Stakeholder
Relationship
Plan
Plan Area
2.1 (GFA)
2.2 (GMRA)
Purpose/Outcome
Activity
When
Who
Improve the quantity and
quality of the raw milk
Regular meetings with GFA
Representatives and an annual review of
the ‘Rules of Supply’
Quarterly
Chairman,
General Manager
& Quality
Assurance
Manager
Align raw milk supply with
demand throughout the
year
Representatives and input from C&E
Quarterly
Chairman,
General
Manager, Quality
Assurance
Manager & C&E
Representatives
Improve the efficiency of
the industry
Representatives
Quarterly
Chairman,
General Manager
& Quality
Assurance
Manager
Maximise sales of milk and
milk-products
Regular meetings with GMRA
Representatives
Monthly
Chairman,
General
Manager, Quality
Assurance
Manager &
Production
Manager
Explore ways to improve
customer service/
Representatives
Monthly
Chairman,
General
Manager, Quality
Assurance
Manager &
Production
Manager
2.3 Trade
Counter
2.4 Retail Trade
and
Commercial
Customers
Discuss operational
procedures
Representatives
Monthly
Chairman,
General
Manager, Quality
Assurance
Manager &
Production
Manager
Review Trade Counter
activity with the aim of
maximising local market
sales of GD products
Improve product availability
and advance ordering
schedules
Continuous programme of meetings with
stakeholders
Throughout
2012/13
Chairman,
General Manager
Review product availability, ordering
schedules, and bulk discount thresholds
Throughout
2012/13
Chairman,
General
Manager, DMB
Increase the awareness and
use of GD products
Continuous programme of meetings with
stakeholders, attend trade shows and
catering/hospitality events
Review and encourage Retail Outlets to
consider better placement of GD products
on their shelves
Throughout
2012/13
General Manager
Throughout
2012/13
Chairman,
General
Manager, GMRA
Representatives
and Retail Outlets
customers
Increase the profile of the
GD
In-store sampling
Encourage the GMRA and the Retail
Chairman,
Page|47
Page|48
3. Raw Milk
Supply Plan
4. Products and
Quality Plan
Outlets to conduct a series of in-store
sampling sessions around key-dates
General
Manager, GMRA
Representatives
and Retail Outlets
customers
Price promotions
Encourage the GMRA and the Retail
Outlets to conduct a series of in-store
promotions on key-products i.e. cheese,
butter & cream (as stocks allow)
Chairman,
General
Manager, GMRA
Representatives
and Retail Outlets
customers
Reduce the need for the
importation of raw milk and
the threat of importation of
processed milk by others
(because the Dairy is short
of milk to maintain product
for liquid milk sales)
Review the effect the removal of the “B”
price had on milk production Jan-March
2012
Throughout
2012/13
Chairman &
General
Manager, SoG
Agricultural
Advisor
Reduce the seasonal
variations of raw milk supply
to the Dairy to match the
islands demand for fresh
liquid milk
Review the effect of the changes made to
Farm quotas
Throughout
2012/13
Chairman &
General
Manager, SoG
Agricultural
Advisor
3.2 Raw Milk
Quality
Improve raw milk quality
Working with the GFA and C&E
Representatives to review and revise the
‘Rules of Supply’
Continuous
throughout
2012/13
4.1 Milk
Production efficiency and
cost control
Review the continuation of the full-cream
litre and half-litre product lines by
Ongoing
throughout
Chairman ,
General
Manager, QAM &
SoG Agricultural
Advisor
General Manage,
Production
3.1 Volume
4.2 Cream
replacing the two with a ¾ litre version
2012/13
Manager, DMB
Obtain revenue from the
sale of advertising space on
the Milk cartons
Continue to work with local advertising
agencies and independently to attract
prospective clients
Ongoing
throughout
2012/13
Chairman,
General Manager
Investigate the feasibility of
cross-advertising on milk
cartons with other mediums
i.e. pro-rata, in the absence
of a fee-paying customer
Continue to liaise with local advertising
agencies, local charities and
independently to attract prospective
clients that would enhance our brand
profile
Ongoing
throughout
2012/13
Chairman,
General Manager
importance of supporting
Guernsey’s dairy industry by
establishing the Guernsey
Dairy brand as a high
quality, high value product
Create, develop & publish a ‘story-board’
feature on key areas within the local dairy
industry
Ongoing
throughout
2012/13
Chairman,
General
Manager, LR&D,
GFA
benefits of supporting
locally produced dairy
products
Marketing and promotional activities to be
carried out in conjunction with the GMRA
and Trade Counter customers.
Ongoing
throughout
2012/13
Chairman,
General
Manager, LR&D
Increase sales of GD cream
and Retail Outlets i.e. the running of
promotional activity and in-store sampling
sessions
Ongoing
throughout
2012/13
Chairman,
General
Manager, GMRA,
attributes of supporting the
Liaise with industry lecturers, chefs and
those affiliated to local schemes e.g. Taste
Ongoing
throughout
Chairman,
General
Page|49
Page|50
4.3 Butter
4.4 Ice-cream
local dairy industry by using
GD products
of Guernsey.
2012/13
Manager, GMRA,
Trade Counter
customers, LR&D
Increase sales of GD butter
and Retail Outlets i.e. the running of
promotional activity and in-store sampling
sessions
Ongoing
throughout
2012/13
Chairman,
General
Manager, GMRA,
PGI recognition for
Guernsey Butter
Submit an application to DEFRA for
Guernsey Dairy butter.
Ongoing
throughout
2012/13
QAM with
consultancy
advice from the
SoG Agricultural
Advisor
Review the effectiveness of
each market sector and its
positioning of GD butter
Ensure the correct positioning of GD butter
in order to maintain the best return on its
investment by supporting the high value
niche market branding associated with its
products
Work with prospective partners to increase
the availability of GD ice-cream at key
sites across the island
Review product range i.e. pack sizes and
flavours, and benchmark the RSP against
the competition
Investigate the feasibility of introducing a
one-litre luxury ice-cream range
Ongoing
throughout
2012/13
Chairman,
General Manager
May. ‘12
Chairman,
General Manager
Dec. ‘12
Chairman,
General Manager
Dec. 12
General
Manager, QAM,
Production
Manager, DMB
Local marketing focus with GMRA and
trade counter customers (and promotion
Throughout
2012/13
General Manager
Increase sales and profile of
GD ice-cream
cost control
Product development
4.5 Cheese
Stimulate market awareness
and improved brand
4.6 Quality
Management
Systems
Review
visibility on cheese
with wine merchants) for Guernsey Dairy
cheeses. Additional POS and “advertorial”
features to be considered
Artisan cheeses
Evaluate the feasibility of making a more
artisan cheese product to compliment the
existing range
Dec. ‘12
General
Manager,
Production
Manager, QAM
cost control
Conduct a cost/benefit study on the
current range of cheeses
Dec. ‘12
General
Manager,
Production
Manager, QAM
Brand visibility
Review the packaging and gas mixtures
used on the retail product line to increase
its visibility and product association with
other GD products
Dec. ‘12
General
Manager,
Production
Manager, QAM
Training and awareness
Conduct specific HACCP level -1 & 3
training (Manufacturing) for the Dairy
‘HACCP Team’ (staff development and
compliance with the QMS in place)
Dec. 12
QAM, Food
Consultancy
Services Ltd.
(FICS)
Product quality is
maintained/improved
GD to work closely with FICS to ensure that
its quality standards are in line with the UK
industry and that efficiencies are
maximised and shelf life/product quality is
closely monitored
Reviewed
quarterly
General
Manager, QAM,
Food
Consultancy
Services Ltd.
(FICS)
Testing protocols are in line
with industry practice
Review the current Laboratory
microbiological testing and audit
Continuous
throughout
QAM, Food
Consultancy
Page|51
Page|52
procedures and establish whether they
remain ‘fit for purpose’
Maintain quality
accreditation
5. Sales &
Marketing
Plan
5.1 Local
Market
Sales
Raise awareness of GD retail
products available
Export of GD products
Explore opportunities for the
export of GD cheese
5.3 Product
Pricing
Services Ltd.
(FICS)
May ‘12
General Manager
July ‘12
General Manager
Ongoing
throughout
2012/13
General Manager
Ongoing
throughout
2012/13
Ongoing
throughout
2012/13
General Manager
Maintain the Dairy’s compliance to the
SALSA scheme and Soil Association
organic status
Establish percentage
market share
Raise industry awareness of
GD catering products on
sale
5.2 Export Sales
2012/13
Continual review of the
Dairy’s product range
leading to a commercially
viable product and pricing
structure
Produce a catering brochure that details
all GD products available and their
respective pack sizes for use by the GD,
GMRA or Trade Account holders
Produce a brochure similar to that for
catering products but detailing GD retail
products – the aim of this being to
distribute a leaflet to every household on
the island
Continue to support existing export
markets ensuring that the best return on
the Dairy’s investment is achieved, also
looking at opportunities that may exist for
one-off export sales of GD products
Continue to monitor the export market
price of cheese to afford the business a
better return on its investment
Continual review and update of all
FAMC’s for each product line and advising
the DMB of any recommendations.
Non-States
Member, General
Manager, Chief
Engineer
Product placement
6. Business and
Operations
Plan
6.1 Business
Outcomes
The GD will undertake periodic
benchmarking exercises to ensure their
products remain competitive against
similar product lines in the same market
sector
The Dairy will make a submission to the Milk
Price Review Panel aiming to provide an
Annual Business Outcome showing an
operating surplus in the region of 5% of
turnover
Periodically
throughout
2012/13
General Manager
June ‘12
Chairman, NonStates Member,
General
Manager,
Financial Service
Provider
As part of the MPRP process, the GD will
request that it is given the financial
resources to enable it to adopt the most
efficient model of funding future
investment from savings, in a similar
manner permitted by other SoG Trading
Boards
Draft and supply information for the Dairy
Industry Review
June ‘12
Chairman, NonStates Member,
General
Manager,
Financial Service
Provider
Throughout
2012/13
Chairman,
General Manager
Improved business efficacy
and reduced operational
costs
Review current ordering schedules and
units of sale for all milk and milk-products
Ongoing
throughout
2012/13
Chairman, DMB,
General
Manager,
Production
Manager, QAM
Improved production
efficacy and reduced
operational costs
Review existing layout of the Dairy’s
production and storage capacity to
ensure that the facility remains ‘fit for
purpose’
Dec. ‘12
General
Manager,
Production
Financial viability and
security
Operational business model
6.2
Operational
Review
Dairy Industry Review
Page|53
Page|54
Manager, QAM
7. Capital
Investment
Plan
6.3
Management
&
Administration
Structure
To maintain optimum
staffing levels
commensurate with the
Dairy’s trading activities
6.4 Business
Continuity and
Security
Review
Plan to deal with the most
important/damaging
threats to Dairy supply to
customers
7.1 CAPEX
To maintain optimum staffing levels and
skills sets across the business unit in order to
fulfil its obligations as a Trading Board
under the remit of the C&E Dept. whilst
continuing to support some form of
centralisation being applied across the
SoG.
The Dairy will continue to review its
continuity and resilience plan and
endeavour to cover the most likely of
events based on a balance of
probabilities
Chairman,
General
Manager,
Director of Client
Services
Throughout
2012/13
Chairman,
General
Manager, Chief
Engineer, Quality
Assurance
Manager (with
consultancy
support)
General
Manager,
Director of Client
Services IT support
(RFH)
Robust and reliable IT
functions
The Dairy will review its ‘IT Risk Strategy’
with central ITU in order for a reliable and
robust service to be provided by the
centre that will service the Dairy’s needs
based on a formal SLA
Ongoing
throughout
2012/13
Brand preference/brand
loyalty’ initiative.
Investigate the cost/benefit of
undertaking a sustained ‘brand
preference/brand loyalty’ initiative.
September 2012
Chairman,
General
Manager, PR
Advisor
Continue to correct the lack
of investment since 2002
and ensure the Dairy is
properly equipped to
collect, process, test & pack
Implement agreed capital investment
plan (see Appendix 4) subject to funds
becoming available based on a ‘save to
Continuous
throughout
2012/13 (see
Appendix 8.3 for
details)
Chairman,
General
Manager, Chief
Engineer, DMB
food in line with EHD
directives and applicable
legislation
spend’ philosophy
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Fig. 9.4 ‐ Percentage contribution to annual sales (2011)
Cheese, 2.16%
Butter, 11.89%
Ice‐cream , 2.03%
Milk
Cream, 3.87%
Cream
Butter
Cheese
Ice‐cream
Milk, 80.05%
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Fig. 9.5 ‐ Percentage Split in milk sales by product type (2011)
Full Cream ½ Litre
1.03%
Organic Low Fat ½ Litre
0.53%
Full Cream Litre
9.63%
Full Cream Pergal
0.15%
Skimmed ½ Litre
1.48%
Skimmed Litre
16.37%
Low Fat Pergal
3.93%
Low Fat ½ Litre
3.59%
Low Fat Litre
63.31%
Fig. 9.6 ‐ Percentage milk sales by milk type (2011)
Full‐cream sales (litres), 10.80%
Organic sales (litres), 0.53%
Skimmed sales (litres), 17.84%
Low‐fat sales (litres)
Skimmed sales (litres)
Full‐cream sales (litres)
Organic sales (litres)
Low‐fat sales (litres), 70.83%
Page|61

business plan - Guernsey Dairy

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