Glanbia moves to boost production in US by 25%

Glanbia is closing in on a deal to increase its cheese production capacity in the US by 25%.

The Kilkenny-headquartered diversified dairy and food ingredients business said, yesterday, via its latest progress update for its current financial year, that it is in “advanced discussions” with its partner in its US joint venture, South-West Cheese, on a plan to expand cheese and whey production at its existing facility in New Mexico, by 25%.

The project is expected to take more than two years to complete and will be done so at an approximate cost of $140m (€128m).

A spokesperson said the move will only be positive, but declined to suggest how much of a benefit it would produce for Glanbia’s annual earnings and revenues going forward.

It is being prompted by a surge in demand for whey-based performance nutrition products such as protein shakes.

Formed in 2006, South-West is a 50:50 joint venture with the Greater Southwest Agency; a collective of local dairy co-operatives.

Its facility in Clovis, New Mexico, is already the largest natural cheese plant in the US. In the first nine months of this year, Glanbia’s total revenues, from wholly-owned businesses, were up by 9%, year-on-year, mainly driven by its Global Performance Nutrition business, which saw revenues increase by 3.8%.

The Global Ingredients division saw revenues fall by 14.3%. Volume growth, in this unit, of 3.6% (mainly driven by the US cheese business) was offset by a near 18% pricing reduction.

The Dairy Ireland business, which owns brands such as Avonmore milk, boosted revenues by over 4%, but joint venture revenues dipped by nearly 20%.