SINCE Milk Link's inception, we have been absolutely focused on developing a business which will provide a sustainable future for our dairy farmer members - the majority of whom are based in the South West.

Through acquiring major processing assets we now have the ability to turn our members' milk into a range of high quality, value added, dairy products whilst at the same time provide them with a long term secure outlet for their milk.

Of course central to our transformation from a commodity raw milk broker into a major producer of dairy products has been our members' commitment and financial support.

However, acquiring processing assets, developing products and growing our commercial partnerships and customer base has necessarily taken a number of years. It is therefore pleasing to be able to say that Milk Link is now starting to deliver returns, as seen by our recent announcement that over £2 million of processing profits is to be distributed to members later this year.

Admittedly this is still a relatively small return but does, I believe, very much signal that Milk Link is financially and commercially stronger and that we have the ability to grow payments from processing to members going forward.

At the heart of our business strategy is adding value to our members' milk through processing it into innovative products that importantly consumers want to buy. To this end, we have recently launched a number of innovative, new ranges which we believe respond to consumer demands for high quality, traceable and great tasting products.

One such major new product is "Tickler," an extra-mature, branded cheddar launched by Milk Link's The Cheese Company. Made in Devon at our multi-award winning Taw Valley Creamery this premier cheddar has an 18-month maturing process and is aimed at cheddar connoisseurs. Through focusing on developing higher value and higher quality cheeses, we are achieving greater profits for our members.

Stocked in Waitrose and Morrisons, we are already seeing sales running well ahead of the projected figures.

Our product development is not limited to cheese. Another product selling well at Morrisons is MARS Family Fuel, a new fresh milk chocolate drink. It is a healthy, nutritious and refreshing drink, with no artificial colours or preservatives and only a 2% fat content. The product contains 74% fresh milk providing a rich natural source of calcium, vitamin B2 and vitamin B12, while having the unique and popular MARS taste of chocolate, malt and caramel.

Another example of how we are adding value is the recent launch of a new kind of healthy milk for Tesco which takes naturally nutritious semi-skimmed milk and enriches it with a mixture of vitamins and minerals. The product tastes just like milk should, but gives consumers a healthy boost to their vitamin, mineral and fibre levels, containing vitamins A, B1, B6, C, D and E, folic acid, inulin and niacin.

The new square pack format for Organic Moo, our wholesome long-life milk from farms which hold Soil Association certification, is also predicted to improve sales and so increase Milk Link's profits. We are already seeing strong sales of the product, up 106% on last year, helped by the substantial growth in the organic milk sector and more listings in retailers. The new pack format has enhanced "pourability," improved storage and is easier to handle, so we are expecting it to give Organic Moo an extra boost over the course of this year.

All these products demonstrate our commitment to achieving better returns from our members' milk by processing it into high quality products - whereas a litre of standard supermarket milk costs an average of 51p, one litre cartons of the vitamin-enriched milk for Tesco retail at 79p, Organic Moo at 84p and MARS Family Fuel at £1.59. Through improving the margins we make on our products, while also cutting operating costs across the business, we are on course to ensure that Milk Link remains a profitable business and delivers a sustainable future for our members as well.

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