Dairy firm Ornua to grow via acquisition and sales
“There will be further joint ventures and some outright acquisitions where they suit our strategy in the coming years,” said Ornua chief executive Kevin Lane. “Any acquisitions will be companies whose presence will give us a footprint and get us going quickly in a given market.”
Ornua’s strongest markets have traditionally been the UK, USA, Germany, and other EU member states. It is making progress in Africa and the Middle East, and has growth strategies in place for China (where it recently entered into the mass market with recent launch of Kerrygold Whole Milk) and for Russia, once trade relations are restored.
“We are doing three things,” said Mr Lane. “We are dialing up our international market presence in target markets, and putting more folks in place in those markets.
“We are developing new products for specific consumer tastes in specific markets, such as whole milk products for Africa, Kerry Cream Liquor for the US market and a UHT milk product for China.
“Those are three new product categories, developed with Teagasc Moorepark in Fermoy, where we have been working with some really excellent people for the past three years, planning new products, investing in new products and new technologies.
“We will have new product rollouts even in the current year. You have to have new products for specific markets. If you go into the Middle East or Africa only offering premium cheese or butter, you find there is no appetite for it.”
Ornua has placed 35 in-market representatives in targeted overseas markets in the past 18 months. These ‘feet on the street’ representatives manage sales, conduct consumer research, and manage relations with customers.
Key Teagasc Moorepark personnel have also visited the target markets for which they are developing new products.
Ornua is also gaining an overseas foothold via strategic acquisitions. Its US acquisitions in 2014 included Thiel Cheese and Ingredients, Wisconsin; and Meadow Ingredients, Minnesota; while the group also established Ornua Ingredients North America.
In the UK, it acquired The Cheese Warehouse, Adams Foods, and FoodTec UK, and agreed a long- term partnership with First Milk.
In Spain, it acquired a cheese business and established Ornua Espana during 2014. Ornua has made acquisitions in Saudi Arabia where it is also constructing a new cheese manufacturing plant.
Ornua’s board has approved an additional €6m investment (up to €36m) in its Centre of Excellence for Kerrygold Production and Butter Packing in Co Cork.
Purchases from members were up 41,000 tonnes on 2013, an increase of 16%, while members also shared a €12m bonus, including cash of €7.5m, up 15% on 2013.
