WORCESTER-based dairy co-operative, First Milk, has entered into a joint venture agreement to manufacture cheese.

First Milk is Britain's largest farmer-owned dairy business and has recently moved its offices from Lower Wick to the Elgar Business Centre, in Hallow.

The co-operative has 4,000 member-farmers and markets around 2.2 billion litres of milk to the dairy-processing sector each year.

In a new initiative aimed at adding value to its members' milk, the company has joined with Irish dairy co-operative Dairygold to produce mature cheddar and other traditional English hard cheeses.

The deal follows First Milk's acquisition of Welsh company Aeron Valley Cheese, in June.

The new Aeron Valley Cheese company confirmed appointments to its board and management team recently, including the appointment of First Milk deputy chairman, Roger Evans, as the company's first chairman.

"I am delighted with this new team, which will drive our plans for growth at Aeron Valley Cheese," said Mr Evans, who is himself a dairy farmer.

"We have a first-class facility, a strong partnership between First Milk and Dairygold, and top-quality managers drawn from both pastures."

He said plans to expand the business would be "good news" for the company's cheese customers, the factory staff and the local dairy farmers who supplied the milk to the site.

The Aeron Valley Cheese facility currently has the capacity to produce around 10,000-tons of cheese a year.

Production of Dairygold's Horlicks Farm cheese has already been brought to the Aeron Valley factory from its previous production site in Illminster, Somerset. Marketing of the Aeron Valley brand will be carried out by Dairygold under the agreement, headed up by Dairygold's director of sales and marketing, John Waters.

Mr Waters said the new venture was a way of "adding value to your milk".

"We were looking for further investment opportunities and branded cheese has huge potential," he said.

"Mature cheddar is a growth area - there has been a shift in consumer demand patterns to mature and away from mild and medium cheeses."

First Milk already markets cheese made in the north of the country by Scottish Milk Products. Scottish Milk joined with Axis Milk in April this year to form First Milk.

The new Aeron Valley Cheese board comprises four First Milk directors: Roger Evans, John Duncan, Mansel Raymond and Jim Maguire, as well as five Dairygold directors.