UK-based Dairy Crest has confirmed plans to expand its milk processing plant at Davidstow, Cornwall, with an investment of £45m.
The company plans to use the whey generated during the production of cheese at the Davidstow creamery to produce demineralized whey powder for baby formula.
Dairy Crest expects production to commence in the first half of 2015 and anticipates that the project will boost its full year operating profits by more than £5m, effectively providing a five-year cash payback.
Dairy Crest CEO Mark Allen said: "We continue to perform in line with our expectations despite the challenging trading environment. The butters and spreads market has been particularly difficult."
"We have offset pressures there by growing our Cheese business, reducing our cost base and improving the underlying performance of Dairies."