Dairy Crest has boosted its march into the Midlands - revealing a newly acquired multi-million pound production site and a crucial supermarket deal.
The company, which is also planning to buy the dairy arm of the Midlands Co-operative Society, has landed a major contract to supply Morrisons with half its fresh-milk supplies.
Dairy Crest - maker of Cathedral City, Clover butter and Utterly Butterly - said separately that it would meet some of the additional supplies through the £16.9 million acquisition of a dairy at Foston in Derbyshire.
A spokesman said this could provide a jobs lifeline for some staff at a historic Birmingham dairy which is earmarked to close as part of the planned Midlands Co-operative Society deal. The Morrisions contract, which has been awarded at the expense of rival Robert Wiseman, offsets some of the disappointment at losing a tie-up with Tesco last year.
Wiseman says the move would have no impact on its Droitwich plant.
Safeway owner Morrisons currently takes supplies from Arla Foods, Dairy Crest and Robert Wiseman, but will now use Arla and Dairy Crest.
The decision ends a round of supply changes involving all the UK's major supermarkets.
Arla was named as sole supplier to Asda while Tesco reduced its number of milk suppliers down to just Arla and Robert Wiseman. Robert Wiseman and Dairy Crest, who both take milk from farmers co-operative First Milk, were awarded long-term contracts with Sainsbury's.
Robert Wiseman said it was "disappointed" at losing the Morrisons contract, which it said was worth £40 million a year in turnover and accounted for around nine per cent of current volumes. It will take "mitigating actions" to reduce the impact, but declined to comment on what this may involve.
Billy Keane, group finance director, said there would be no effect on the firm's Droitwich plant which employs 400 people. He said the company had very little Morrisons business in the Midlands.
He said Droitwich currently produces ten-million litres a week and "will continue to produce ten million litres a week".
While Dairy Crest's biggest sites are at Severnside in Gloucestershire and Chadwell Heath in Essex, it will use the newly-acquired Starcross diary at Foston to boost its supplies to customers in the north of England. The company has previously stated it wanted to increase its foothold in the Midlands.
The company is also closing in on a deal for the regional dairy arm of the Midlands Co-operative Society.
That sale would be likely to see the closure of the Co-op's historic Vauxhall plant in the west of the city, putting 330 jobs at risk, as production is transferred to other facilities.
A spokesman said there would be the possibility of some jobs being available for transfer to Foston.
The spokesman said the dairy is expected to expand from its current staffing of around 20 to "something in the region of 100".