GRAHAM’S The Family Dairy has signalled its ambition to expand its range of products by agreeing to buy a production site from First Milk for an undisclosed sum.

All 79 staff at Glenfield Dairy are being retained as part of the deal, which is expected to formally complete early in December.

At the moment Glenfield in Cowdenbeath, Fife, makes cottage cheese, quark and sour cream.

It is anticipated that over time those products will be added to the branded Graham’s range which already includes milk, butter, cream, cheddar, yoghurt and ice-cream.

The bulk of its product range is available in supermarkets.

Graham’s, which employs around 500, suggested it will also look to invest at the new site and it continues to have an open mind on further expansion.

Robert Graham, managing director, said: “This is an exciting acquisition for us as it allows us to extend our product range for customers and consumers even further, with the addition of cottage cheese and quark. In addition, this deal presents great potential to explore further new product development going forward.

“Our core values run through the very heart of our business – family, farming and high quality products that taste great. We plan to bring these principles to Glenfield as they become part of the Graham’s family.

“We’re delighted to be expanding the business on home turf and will continue to be mindful of future growth opportunities.”

First Milk, the farmer owned co-operative, bought Glenfield in 2011 when it was known as Kingdom Dairy and Kingdom Cheese.

Mike Gallacher, chief executive of First Milk, said: “The sale of Glenfield Dairy follows a full strategic review by the Board over the summer. It will allow us to focus even more closely on our core businesses in hard cheese and liquid brokering.

“This is already starting to drive improvement with the business moving into a positive operating profit at mid-year, consistent with the phasing of our turnaround plan. We are confident that this focus will deliver improved milk prices and a more sustainable business model for our farmer shareholders.

“Glenfield fits well with Graham’s other well-established dairy operations and the sale protects employment at the site and hence the broader Scottish dairy sector.”

Graham’s reported turnover of £85m, up from £68m, in the 12 months to March 31, 2014 with pre-tax profit increasing from £1m to more than £1.3m.

The main Graham’s farm and production site is in Bridge of Allan, Stirlingshire, although it also has premises in Nairn where its ice-cream is made.

In May this year the company said it was spending around £1m in plant and technology at its main Aithrey Kerse Farm to expand its spreadable butter presence.

That came just a few months after it unveiled plans for a £20m dairy with adjacent research and training facility around three miles from its current base.

That project is expected to take up to three years to complete but could lead to staff numbers eventually rising to more than 900.