The investment will also enable ADL to increase storage capacity for both specialty cheese products and packaging supplies.
The bulk of the investment comes from AAFC's Dairy Processing Investment Fund (C$4.4m/US$3.5m) and the rest from the Atlantic Canada Opportunities Agency, ACOA's Business Development Program.
The dairy sector contributes C$24bn (US$19m) to the Canadian economy through sales by farmers and food processors, including more than C$80m (US$63m) in farm cash receipts from PEI.
Increase of production and storage
The announcement was made by Canada's Agriculture and Agri-Food Minister, Lawrence MacAulay, at ADL's annual general meeting in Summerside.
MacAuley said ADL is a great example of the economic benefits that come from a strong dairy processing industry, and that the modernization project will strengthen PEI's dairy industry, its food processing sector and the island's overall economy.
Jim Bradley, ADL CEO, said the funding will allow ADL to adapt to the new realities in the Canadian dairy industry and invest in the infrastructure and innovation that are needed to grow and diversify.
“The ADL Water Street cheese plant expansion will increase production capacity by 40% and increase storage capacity by 30%,” Bradley said.
“Improvements and modernization of processing equipment and technology will also allow ADL to work with our partners to diversify products and seek new markets. ADL is proudly owned by 165 family dairy farms and today's announcement provides them the confidence to continue investing in their farm operations."
The dairy processing cooperative, which was created in 1953, has 260 employees.