Glanbia has an opportunity for major growth
That setback was due to the collapse in global dairy markets but the figures for last year show markets have picked up and the Kilkenny-based group is forecasting double digit earnings growth as rising incomes in emerging countries, including China, will once again underpin demand.
Economists and indeed the dairy sector are keenly aware that rising incomes result in a shift to greater dairy consumption and with the world economy again moving in the right direction, despite interest rates and ongoing banking concerns in some parts of the world, especially Europe.
Prior to the global banking in 2008, the prevailing view was that demand for dairy produce would grow uninterrupted as the Asian markets in particular drove demand.
As calm returns to the financial markets and global demand starts to pick up, it seems a given at this stage that Glanbia and all of those in dairy sector who can compete internationally will enjoy rising profits in the years ahead.
Uncertainties will always be part of any forecasting regime, but the international view is that after the credit crunch shocks the world is starting to move on bringing with it significant potential for Glanbia.
Apart from its strong cheese interests in the US where the group is the biggest producer of cheddar cheese with nearly 20% of the market, it has been targeting the nutritionals business in recent years and continues to position itself for growth in the sector.
This evolving sector offers a variety of product ranges from high protein bars to sports drinks to meet the exacting demands of sports people all over the world.
Also as the world becomes increasingly health conscious and with a substantial number of people now over 65, thanks to better health care and better diet, the demand for meals and diet solutions that will provide direct medicinal as well as nutritional value will offer massive scope for development.
That was a high talking point to emerge from the Farmleigh get together two years ago when the great and the good came from all over the world to come up with ideas on how to set the scene for an Irish economic revival.
That was before the bailout, and before we fully realised how deep the problems facing us were about to become, but the exercise was still valid.
The opportunities are endless and John Moloney, chief executive of Glanbia, whose focus is very much overseas, believes the potential for the group’s dairy farmers is significant.
Speaking after announcement of the group’s results last week he said the potential for the dairy industry post the quota regime in 2015 “is significant”.
The Irish dairy sector has had few opportunities to expand since 1984.
But dairy farmers have the technology combined with a good grass based production system which offers the opportunities to dairy farmers to expand significantly from 2015 one, he said.
New Zealand which has been highly successful is the benchmark for Ireland and its success has to be an inspiration as the other significant exporter in the world, as to what this economy can achieve, he said.
When you couple those advantages to global demand, which experienced a 33% increase in global trade over the last three years as well as an increased convergence of price, growing the outlook has to be very positive for Irish dairy farmers, he said.
Mr Moloney added that the group is working closely with Glanbia farmers who are putting together significant expansion plans to ensure both sides are working to the same strategic plan.
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