US acquisition in food firm’s expansion plan
Group managing director John Maloney was coy about setting out a pricing strategy.
But Mr Maloney stressed that the industry was “knowledge-based” and Glanbia required more involvement in it to provide a better and more financially-rewarding service to clients.
The group has supplied energy-adding ingredients for sports drinks and a product that enhances iron in foods, particularly to the baby market.
The group looks to have a clear focus on a range of dairy and meat products and on food ingredients driven by the need to extract more value from its massive milk pool.
On a difficult day for the markets, the share price dipped a cent to 1.55. The result could be described as reassuring from a market perspective, rather than dynamic.
Glanbia’s share price hit a low this year of 1.11 compared to 42 in 2001 and a similar low in 2000.
In 1998, the group hit a high of 4.53 and has struggled since to define itself as a coherent food group.
Results from the group yesterday indicate however that, while it is heading back in the right direction, it has in-built weaknesses.
Its high exposure to milk leaves it open to the global market.
And despite assertions about moving into food ingredients, that process is in its early stages.
If, however, the group moves up the value-added chain in this area, as Mr Maloney expects, Glanbia could set the scene for solid growth.
Some analysts think the food sector here is undervalued compared to international peers.
However, its spotted history means it will take time for businesses to establish before they start risking too much of their funds on stock.
Glanbia’s pizza-cheese joint venture is doing well, while in the US, where it is a major cheese producer, a switch to more natural cheeses by the consumer there is benefiting results.
Evaluation of its Rooskey pig processing plant, which was destroyed by fire, is under way.
The Danish Meat Research Institute has been deployed to ensure a state-of-the-art plant that is capable of competing with the best operations in the world.
The institute’s report is due in October and Glanbia is keen to have its third plant back in action.
This would take the pressure off its other pork plants in Roscrea and Edenderry, which have been filling the gap since fire wiped out the Rooskey operation.
