GRAHAM'S The Family Dairy has declared its plans to build a £20 million dairy with research and training facility in Stirling heralds a "step change" in its growth strategy.

The project, which Graham's expects to complete in two to three years, will see the company shift its main dairy operation to the site to the west of Craigforth.

Graham's has ambitions to employ 450 staff at the 150,000 square foot dairy, ultimately taking Graham's headcount to about 900.

Production will continue at its existing dairy at Airthrey Kerse, Bridge of Allan, but it will be scaled down to focus largely on butter and ice-cream production.

The bigger volumes in liquid, as well as cheese production, will be handled at the new site, which will have the capacity to make 350m litres of milk per year.

Some staff will move to the new operation, which is located roughly three miles away. However processing will continue to take place at Graham's plant in Nairn, which is likely to receive more investment.

A full planning application will be lodged with Stirling Council in June, with a pre-planning application having already being submitted to the authority.

Managing director Robert Graham said: "This project allows us to really [bring about a] step change our investment. It's about a new dairy but it's also about being able to take a step change in investment in marketing, R&D, recruiting and training and skills.

"It allows us to leverage up right across the business. Obviously a big part of that is the new dairy.

"There's the soft sides around marketing, R&D, training and skills, but it is also about investment through our whole business in Scotland, allowing us to invest more in our site in Nairn and look at our supply chain network, our distribution network and take more significant steps across the whole business in a quicker time scale."

Mr Graham said the investment will help Graham's compete more effectively with the two biggest companies in the UK dairy sector, which each turn over about £2 billion. Graham's turned over more than £85m in the year ended March 31, up from £68m the year prior.

Mr Graham said: "These are our competitors, and they are big. We are a family business and we are a large business, but in the context of them we are a lot smaller. That's why we have to be sensible with what we do as a business. We have to be smart [and] act quickly to compete against these giants."

The £20m million investment will cover the cost of constructing the dairy, as well as equipment such as filling lines, a biogas combined heat and power unit and research facilities.

Having farmed in Stirlingshire for five generations, Mr Graham said it had been important for the business to find a site in the area for the new operation. He said: "It's an important part of the history of our business and the values on which our business has been built; it's in our DNA. It was important to do as best as we could to get a site in Stirling."

The company plans to work with Forth Valley College to put an apprenticeship scheme in place. Asked how quickly he expected to employ the anticipated 450, Mr Graham said it will be a gradual process. He stated: "It is a big number, 450 jobs. But when I started in this business there were 17 employees, and they weren't even full-time. Now we are over 500."

On production innovation, Mr Graham cited Graham's research would focus on the products consumers will want in three, five and 10 years time. This could revolve around flavours, chilled coffee or long-term products, he said.

Graham's is currently in the midst of a busy spell of new product development, and will follow the recent relaunch of its ice-cream range with spreadable butters and yoghurts in the coming months.

Mr Graham said: "Dairy is a great food, it's a great drink, and it's got a great variety of uses right across a number of categories.

Noting that the country's biggest spreadable butter brand in Scotland is Danish, the biggest cheese is brand Cornish and the biggest yoghurt hailing from England, Mr Graham declared that "there is lot for us to go at in this industry. It's about delivering on that."