Irish co-ops ‘do not have resources to expand in line with state targets’

IRISH co-ops do not have the money to expand the country’s milk processing capacity in line with the Government’s stated mid-term target of a 50% productivity increase, according to the Irish Co-operative Organisation Society Ltd (ICOS).

While the Government has ambitious plans to gear the country’s dairy production up to capitalise on predicted increased demand across the EU by 2020, the co-ops are pointing out that commodity milk processing has been loss-making over recent years, and the industry does not have sufficient capital to fund a dramatic expansion in capacity.

ICOS dairy policy executive TJ Flanagan said: “Quotas are going in 2015, so they will become less relevant as the projected 50% production increase gets nearer. If new plants have to be built, the question is who will pay for all that stainless steel? A 50% increase could mean an €800m cost. If a new factory has to be built on a green field site, that one-off capital cost could come to 30c per litre at current production levels.