Meadow Foods is to inject £1.8m in its Chester creamery which will enable the business to manufacture and store skimmed and blended concentrated milks for the first time.

The dairy producer, which also has factories in Peterborough and Holme-on-Spalding in East Yorkshire, said the additional processing capacity would give it extra “flexibility as a business to deal with surplus milk volumes at certain times of the year.”

“We are increasing capacity to deal with increasing volumes of milk both over the last 12 months and going forwards after quotas end in 2015,” a spokesman said.

Separation facilities and reverse osmosis technology will be introduced alongside chill and storage services at the Chester site, with work due to complete before 31 March 2015.

Earlier this week the business, which produces cream, butter, sweetened condensed milk, anhydrous milk fat, chocolate crumb, and cultured products, posted a 15.6% increase in earnings. Operating profit leapt to £11.2m in the 12 months to 31 March 2014 and turnover was also up 23% to £420.7 million.

“We are pleased to report some strong results in a challenging marketplace,” Simon Chantler, executive chairman of the business - which produces cream, butter, sweetened condensed milk, anhydrous milk fat, chocolate crumb and cultured products - said.

“The improved profits, which have grown in line with volume sales, allow us to continue to reinvest into the business in order to grow sustainably and offer stability to both our farmers and customers in a fast growing market place.”

The company also announced that Mark Chantler, a former dairy farmer and son of founder Simon, had been internally promoted to managing director of ingredients with overall responsibility for the company’s fat, sugar, and fresh divisions. He had previously worked as Meadow Foods’ commercial manager.