DAIRY farmers in the South have pledged just under £10 million to underpin United Milk's dairy processing and manufacturing plans in Wiltshire.

Applications for shares in United have topped £9.75 million. This is the minimum level of investment from dairy farmers required, to raise the balance needed, but directors say they believe the rest of the funding to allow the project to go ahead should be secured within a matter of weeks.

United Milk plans to establish a large state-of-the-art, highly efficient milk processing and manufacturing facility at Westbury.

Based at Wylye, Wiltshire, United Milk currently operates as a farmer-owned milk marketing business for 850 dairy farmers in southern, south western and central England, producing more than 810 million litres of milk annually.

Total cost of the project is put at over £50 million and is supported by a conditional offer from the Bank of Scot-land. Directors say to secure additional funding, meetings with potential third party backers are being held in a bid to have the entire financial package in place by the end of September.

But to remain farmer-owner, United Milk needs farmer-owned equity as the preferred source of finance to bridge the funding gap.

"We are delighted with the offer success and tremendous weight of support shown by dairy farmers,'' said Don Morris, United Milk chief executive.

"It demonstrates the very real commitment and enthusiasm among like-minded producers for United's major independent processing venture.

"Investing farmers fully recognise the potential and the absolute necessity for a highly efficient and market-leading farmer-owned processing and manufacturing capability within the UK. They want to be partners within it and are prepared to buy into it.''

In return for their investment in the butter and powder plant, farmers can expect a milk supply contract with no cap on production, a contractual minimum price and the possibility of bonuses and dividends, as well as the likelihood of capital growth in their investment.

Converted for the new archive on 25 January 2001. Some images and formatting may have been lost in the conversion.