Rising skyr sales drive expansion at Selfoss dairy plant

Icelandic dairy company Mjólkursamsalan is expanding its processing plant in Selfoss as skyr production and sales grow, Morgunblaðið reports. The new 1,500-square-metre building is expected to begin production next spring.

The walls have been poured and work is under way to close the roof. The next step is to install pipes and electrical equipment before fitting out the building for skyr processing. The project is expected to cost nearly 1.3 billion Icelandic krónur.

“The expansion in Selfoss has been in preparation for a long time and is a very important project,” said Pálmi Vilhjálmsson, chief executive of Mjólkursamsalan.

The new building will create more room for the company’s operations and production in Selfoss. Plans for the coming years also include an energy building to house refrigeration compressors, steam production and other equipment needed for dairy processing.

The plant now processes 83,000 tonnes of raw milk a year, an increase of 4,000 tonnes in two years. Its main activities include packaging drinking milk and making fermented products, G-products, spreads and milk powder. The milk comes from farmers stretching from Snæfellsnes in the west to Skeiðarársandur in the east.

Mjólkursamsalan produces about 9,700 tonnes of skyr annually, up around 55 per cent in two years. Demand for protein-rich dairy products has driven the increase, Pálmi said. Over the past 12 months, about 6,200 tonnes, or 63 per cent of the company’s skyr production, went to export markets; the domestic market accounted for the remaining 37 per cent.

The Netherlands, France and Switzerland are the main destinations for Icelandic skyr. The products are shipped from Þorlákshöfn to Rotterdam on Smyril-Line vessels, with transport from the Selfoss plant to European markets taking three to four days.

Sales of Hleðsla, a product in which milk proteins play a central role, are also increasing. Whey protein powder, used in health products and mainly produced for export, is made at the KS and Mjólkursamsalan facility in Sauðárkrókur. Pálmi said growth in exports strengthens Iceland’s dairy industry and supports its businesses, farmers and consumers.