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A dairy co-operative in Gwynedd has been boosted by a £50m cheese contract.

South Caernarfon Creameries, which employs 110 workers, will begin supplying Adams Foods Limited from January.

As a result the creamery also announced plans to build a new cheese making production facility by 2016 at their Chwilog site.

The boost comes just weeks after 10 workers were made redundant when the company lost a milk supply contract.

From next Sunday local milk distribution will be transferred to Cotteswold Dairy, in Gloucester, which will continue to supply milk under the South Caernarfon Creameries 'Dragon' brand.

Creameries managing director Alan Wyn Jones said ending liquid milk processing was a historical landmark for the business.

"Although this is a very small part of our business, it was not an easy decision since we have a social responsibility to the local community that we serve," he said.

He added that long-term job creation at the site depended on the plant being able to access enough milk for its needs.

There are currently 30 co-operative members and Mr Jones said he would welcome more.