Moloney buoyed up as rising global demand drives growth

GLANBIA chief executive John Moloney is buoyed up by prospects for the group given the improving outlook for global demand.

Countries such as China India, Pakistan and more recently Russia are underpinning demand and prices. That improved outlook is set to continue throughout this year and the group is talking about an 11% to 13% growth in adjusted earnings per share in 2011.

While that is well below the 24% delivered in 2010, in the context of the industry, it compares well with its peers.

Despite the change for the better after the significant losses incurred by the dairy ingredients business in 2009, Mr Moloney would not be drawn into rash forecast about the pace of growth he is planning for the group.

He admitted that if the co-op had succeeded in buying out the Irish dairy and agri business operations last year, the plc would have had less restraints on it and “faster growth” would be on the cards in the years ahead.

Though confident about the growth potential for Glanbia and for the Irish dairy sector overall, he refused to be drawn on how fast he wants to see the business grow.

“Turnover is vanity, profit is sanity” was as far as he would go in terms of his ambitions to grow the group.

He is in do doubt about the future of the dairy sector. Global dairy trade has risen 33% in the past three years and as standards of living increase, demand for dairy products will grow as well, he said.

He said the potential for the dairy industry in Ireland) “is significant”.

It has been held back by the quota system which ends early 2015.

After that, Ireland with its efficient grass-based system of milk production will have substantial opportunities to exploit the growing global demand for dairy produce.

Glanbia is already talking to its farmer shareholders to ensure that the ambitions of both sides coincide in the post quota environment, he said.

But the group already has strong positions in the US in cheddar cheese and is steadily evolving its global nutritionals operations.

At the start of this year the group acquired Bio-engineered Supplements and Nutrition (BSN) for €108 million.

This deepens the group’s involvement in what is called the performance nutrition portfolio involving sports drinks and bars.

Mr Moloney notes that the area of health in general with aging populations offering huge scope for companies to come up with food products that give people better quality of life. The area of muscle retention is an area getting a lot of attention in that regard, he said.