Danone expanding in Cork to capitalise on 2015 quota cessation
Danone, in Macroom, is completing its €50m expansion, with the gas supply to the plant up and running since last October (this has enabled gas supply to Macroom town, where Bord Gáis is busily installing).
Danone recruitment has reached its target of 140 staff, increased from 70. Danone International is made up of dairy, water, baby-nutrition, and baby medical-nutrition divisions. The Macroom plant is a baby-nutrition division.
Macroom makes the base powder, the building blocks that go into every Danone baby-nutrition formula — starter, follow-on and grown-up milk.
The formula is packed in Danone’s Wexford plant, as well as at numerous plants across Europe.
Wexford is also expanding, to satisfy growing demand, by putting in a new packing plant and increasing its staff to 160 — which will bring the staff at Macroom and Wexford to 300.
The Macroom factory is expected be the largest, and most technologically advanced, manufacturing centre in Danone baby-nutrition’s global network, resulting in a trebling of capacity to 100,000 tonnes annually, after the creation of a new drying line.
When it is operating at full capacity, the projection is that 20% of the world’s infant milk formula will be produced in Ireland. This means one in five babies in the world who are fed infant milk will use an Irish produce.
Of all 14 Danone baby-formula production plants worldwide, from Asia to South America, Macroom is the largest, and is responsible for producing 80% of the base powder for Europe.
Danone can also boast that it is the biggest Irish baby-formula manufacturer, and the biggest in Europe.
Product from Macroom ends up on supermarket shelves as a variety of Danone baby brands, including Cow & Gate and Aptamil here in Ireland.
“Our base powder goes into every single formula across the Danone group,” says Donal Dennehy, operations director for Ireland.
The process involves taking cow’s milk, breaking it down, and rebuilding it as breast milk.
Danone’s nutrition people say that breast is the best for baby, and that their infant formula is an alternative when mothers cannot, or decide not to, breast-feed.
Following its expansion, the Macroom plant will take raw materials from the equivalent of 690m litres of Irish milk annually. Dairygold Co-op is their chief supplier; a large proportion of the co-op’s milk is used in the manufacture of Danone baby formulas.
While Irish milk accounts for 60% of all the ingredients, the Macroom plant does not take in milk in its raw state.
Dairygold supplies the skim milk, de-mineralised whey and lactose (the sugar in milk). From these, and other added ingredients, Danone makes the base powder for the formulas.
“We take the skim milk fraction, which would be the protein, and we take the de-mineralised whey, another milk derivative. It’s demineralised because babies don’t like salt, so you have to remove all the salts.
“Babies do, however, like protein. We add back in all the vitamins and minerals to replicate breast milk,” Donal says.
“We take out the cow’s minerals and vitamins, and we replace them, and we use lactose, which is the sugar in the milk, and then we use specialised ingredients, like specialised fish oils, very, very specialised and very expensive ones, and we use vegetable oils as well,” he says.
Overall, 60% of the ingredients come from Ireland, in the form of Irish milk constituents — the other 40% come from all over the world.
Across the different Danone products, milk ingredients can be as high as 70% or as low as 50%, depending on the formula.
“They add, in the packing plants, what’s known as a master batch, which will include some of the flavours, some minerals and vitamins with a very short shelf life. But, basically, we do the building blocks here, so we do about 20 different formulas across the three stages of development,” Donal says.
Why Irish milk? “You get better milk from grass-fed cows. Its availability helps, because we’re an agriculture-based country,” says Donal, adding that cows are housed off-grass on the Continent and elsewhere.
“Unfortunately, then, in winter, we have to switch our plants to powders. The peaks of the milks and wheys are dried during the summer, and we then re-use them in the winter,” he says.
Dairygold can’t supply enough in winter, and then Danone switches to taking powder from a variety of suppliers, including Lakelands, Glanbia and Kerry.
The ending of milk quotas in 2015 is one of the factors driving the expansion at Macroom.
“That was one of the reasons why we expanded the plant here, because the quota system is being lifted in 2015, and milk is expected, on average, to go up somewhere between 30% and 40%, which augurs well for Danone,” Donal says.
Milk prices are high at present, but, as Donal says, Ireland has no impact on the price of milk.
“It’s a world-market price now. If it rises on the world stage, it rises in Ireland, because the co-ops can export their produce to get the best prices,” he says.
