€510m Glanbia boost predicted

The economy will get an annual €510m boost as Glanbia and its milk suppliers ramp-up investment and production by 2020 following the elimination of milk quotas in 2015.

Environment Minister Phil Hogan yesterday opened a €21m investment at Glanbia’s Dairy Ingredients Ireland milk processing facility in Ballyragget, Co Kilkenny.

It marks the culmination of a €107m gross investment by Dairy Ingredients Ireland since 2007.

Glanbia Plc, the country’s third largest indigenous exporter, took the opportunity to release an economic assessment undertaken by Ernst & Young that predicts an annual €510m economic boost by 2020 arising from planned milk expansion by Glanbia and its milk suppliers.

Group managing director John Moloney made clear that this boost will not happen if farmers and other Glanbia Co-op members do not vote for a joint venture project between the co-op and Glanbia on Nov 13.

He said nobody was forcing anything on members of the co-op but stressed that they had strategic choices to make on what kind of structuring they want in terns of milk production and payment into the future.

He said they also had to decide on whether or not to extract some value from their shareholding in Glanbia plc, which is worth in excess of €1bn.

The proposed joint venture would run milk processing ahead of the end of EU quotas on milk production in three years and eventually lead to milk production and processing being privatised and controlled by the co-op.

Under the proposal, the joint venture will be split 60:40 between the co-op and plc, and a new milk processing plant would be built at Belview Port in Kilkenny.

If the proposal passes, co-op shareholders will then vote on whether to reduce its holding in the plc from 54% to 41%, the proceeds of which would be used to finance the co-op’s part of the joint venture and also to provide for a share spin-out.

The Glanbia facility in Ballyragget is one of Europe’s largest integrated dairy processing facilities and the latest investment in a new whey protein isolate plant is in response to growing global customer demand for dairy protein available.