Glanbia faces new year with cautious optimism at signs of market recovery

GLANBIA has told its suppliers it is facing 2010 with cautious optimism, stemming from signs of market recovery.

Group chairman Liam Herlihy said in a Christmas message to Glanbia suppliers that the past year had been very difficult.

He said the impact of low milk and grain prices had been very severe for both farm families and the food group.

A number of factors gave rise to these low prices, primarily an oversupply on global dairy and grain markets, which was compounded by the fact that consumers are buying less arising from the global economic downturn.

The imbalance in supply and demand, exacerbated by the removal of European Union market supports, gives rise to ongoing volatility.

Mr Herlihy said the market environment has presented serious challenges to farm families and Glanbia.

“Our dairy ingredients business is in a loss-making position for the first time ever this year and, indeed, many farm families are also in the same position.

“Fortunately, in recent months, dairy markets have slowly started to improve. We face 2010 with cautious optimism, stemming from signs of market recovery,” he said.

Mr Herlihy stressed, however, that Glanbia is also determined to sustain its business through ongoing volatility and in the context of overall group reorganisation.

It undertook a strategic review of Glanbia Dairy Ingredients Ireland to maintain its competitive position and take advantage of commercial opportunities as they arise. In November, the business announced the result of this review, including more technology-based optimisation, building on the last investment programme and, regrettably, there is also a need for further redundancies within the business.

“This programme is designed to support and retain our 4,500 farmer-supplier base, the 500 remaining jobs, and to enable us to continue grow the business for the future,” he said.

Mr Herlihy said, while Glanbia will continue to assess and respond to these ongoing challenges, there is a fundamental need for a consolidated industry approach, supported by Government.

“A productive farming sector is critical to our future economic recovery and to secure the livelihoods of our farm families and the tens of thousands employed in the industry.

“We must all strive to do what we can to ensure that as an industry we receive this recognition at national and EU level,” he said.