Avonmore Waterford is to invest £32 million (#40.8 million) in a major expansion of its American cheese and British foodservice business.

In the United States, Avonmore is investing $36 million in the Avonmore West operation in Idaho to increase cheese production capacity of 30 per cent to around 120,000 tonnes and dairy-based food ingredients production by 22 per cent to around 54,000 tonnes. This further expansion follows a previous $20 million investment in Idaho which began in 1996.

In addition, Avonmore West is to install new equipment for the production of milk calcium to meet demand from the food sector in the United States and Asia. This investment is expected to be completed in February 2000 and will result in milk intake rising to 240 million gallons.

Avonmore West is the largest producer of cheese and whey-based food ingredients in the north-western United States and when the new investment is complete, will make the Irish group the fourth biggest producer of cheese in the US.

In the UK, Avonmore is investing £7.3 million sterling (£8.3 million) in an enlarged distribution facility in Tamworth for its Cuisine Foodservice subsidiary. The group intends to extend its product range to include fresh produce such as fresh meat in addition to the current range of chilled foods.

The new facilities will be commissioned in September next year and with a floor area of 12,600 square metres, will be double the size of Avonmore's existing facilities in Tamworth.

Avonmore Waterford chief executive Pat O'Neill said the expansion of the Idaho cheese business means that the group has increased its production from 10,000 tonnes a year when it first moved into Idaho in 1990 to 120,000 tonnes when the investment is complete. "That's one and a half times the total cheese production in the Republic of Ireland," he said.

On the investment in the Cuisine Foodservice business in the UK, Mr O'Neill said: "At the time of the merger, Cuisine had sales of £120 million in 1997 and it will be £140 million in 1998. Our aim is to increase Cuisine sales to £200 million within three years and this investment is part of that strategy."

Mr O'Neill said that the group's restructuring programme is now about 80 per cent complete with the closure of four milk plants in Ireland - Dungarvan, Dundalk, Clonmel and Castlelyons and that the plant in Rathfarnham will be closed by the middle of the year. "All we planned to in the restructuring has been done," he stated.