Only the strong survive: New motto for Dairygold Co-op
He thanked shareholders for a resounding mandate at the society's AGM and SGM last April to put the business on a competitive and strong footing. "That trust is being and will continue to be rewarded handsomely over the next few years", he told them.
"The progress made to-date has been the result of a team effort on the part of the management, the staff, the Board and you the shareholders. The team wearing the Dairygold jersey has now become strong, lean, fit and determined to succeed and we will succeed", he said.
"Over the course of 2004, we made steady progress in redefining the work culture in Dairygold in terms of work-practices, performance measures, flexibility and focus and in doing so we are empowering people to enjoy their work and to realise their potential to work to world-class standards", added the Dairygold Chairman.
He said the "new" Dairygold is in place, and it is now a question of building on that progress and driving to maximise milk price, minimise farm input costs, and grow the value of shareholdings in Dairygold.
Part of the policy going forward will be to co-operate with neighbours, where appropriate, to share facilities and production assets to contract manufacture dairy products as cost-efficiently as possible, according to Chief Executive Jerry Henchy.
This is the thinking behind the new co-processing manufacturing relationship with Glanbia, what Mr Henchy describes as Dairygold's "pragmatic solution" to the slow progress towards consolidation of the Irish dairy industry, which he says is partly due to the route to rationalisation being generally perceived as through takeovers or mergers only.
The agreement is "in line with Glanbia's strategy of maximising scale and efficiency in the most appropriate way", said John Moloney, Glanbia plc Group Managing Director.
"The CMP brands will further strengthen Glanbia's Consumer Foods' customer offering as one of Ireland's leading suppliers of chilled foods and beverages to the retail and food service sectors.
Likewise the contract manufacturing agreement is consistent with our strategy of developing further industry alliances and co-operation to achieve mutual efficiencies.
Glanbia has a long track record of co-operation with other processors, including Dairygold, and we view this mechanism as a sensible way forward for the industry," said Mr Moloney.
Under the terms of the agreement, Glanbia will operate the CMP liquid milk, cream and juice brands from Dairygold, for a consideration of €10.05m.
The deal includes the relevant sales and distribution assets, but excludes the production and chill facility.
Dairygold's 130 liquid milk suppliers will continue to supply Dairygold, and Dairygold will sell the CMP liquid milk pool on to Glanbia. Glanbia will continue to supply the CMP milk, dairy and juice brands into the Cork area, including continuing CMP door-to-door deliveries.
