The Irish Dairy Board (IDB) has announced plans for a €30m state-of-the-art butter production and packing facility that will centralise Kerrygold butter production, packing and innovation in Mitchelstown, Co Cork.

The site and services will be leased from Dairygold, but the plant will be operated by the IDB, their first in Ireland. At present, Kerrygold butter is produced and packed at six locations by IDB members.

“Irish farmers produce the best butter in the world and we want a state-of-the-art facility to match that,” IDB chief executive Kevin Lane explained yesterday.

For 40 weeks of the year, the plant will make butter from fresh cream pumped from the adjacent Dairygold plant, as well as cream from other IDB members.

The plant will facilitate the production of new butter products and formats for global markets. At present, only IDB Germany can produce some increasingly popular consumer butter packs. An innovation centre will also be included.

IDB chairman Aaron Forde said that the company returned a milk price value in 2013 that was 7% higher than the average delivered by a pool of European milk processors.

Kevin Lane also ruled out the possibility of the Irish Dairy Board (IDB) selling product through the Global Dairy Trade platform. He said that he would describe it as a “failure” if an online auction was the best market that the IDB could secure for “high-quality Irish produce”.

Joe Collins, head of ingredients and trading with the IDB, said that the board purchases some product through the auction to meet some international customer needs.