Dairygold faces tough decisions

A BIG job of work has to be done to ensure that Dairygold Co-op will prosper in the face of the challenges facing the dairy sector.

That’s the view of the food processing group’s new chairman John Walsh, a dairy farmer from Boher, Co Limerick, who said painful decisions will impact all areas of the business.

“As a collective of farmer shareholders, who own a strong and valuable business, we will work together to build a stronger and profitable business,” said Mr Walsh. “To achieve this we must leave aside the localised rivalries of the past and work to build a strong and more profitable business in Dairygold to best serve our future needs.”

Following a big drop in profits last year, the near€1 billion turnover co-op is preparing a strategic plan. This is likely to result in up to 1,500 jobs being shed over the next three years.

However, the co-op believes the net figure will be less than 1,000 when outsourcing initiatives and the sale and privatisation of some business units are taken into account.

In a message published in the co-op’s newsletter, Mr Walsh said Dairygold has served its farmer shareholders well over the years, not least in milk price leadership.

He appealed to those who have expressed unease in recent times to give to co-op and its ‘go forward’ objectives their full support.

Only by giving the co-op their committed support will their collective ambitions for a strong and successful Dairygold be more readily and quickly delivered.

“It is and will remain a difficult time for Irish dairying,” said Mr Walsh. “Yet we must move on and secure a future for Irish dairy output into the British and EU marketplace.”

Mr Walsh said Dairygold will respond confidently and capably to the challenges presented. It will build from an already strong base, a dairy processing business equipped to face the future.

“By progressively evolving our dairy processing business, including the sale of non-core and under-performing assets as we go forward, Dairygold will become a world-class consumer foods business of scale.

“In doing this, Dairygold will hold with its tradition of serving its farmers, employees and customers to best possible effect and to delivering the best sustainable milk price that the marketplace can return.”

Mr Walsh said the fact that the co-op is reducing its workforce through outsource contracting, voluntary redundancy and an early retirement programme, as well as planning the sell-off of some non-core business units and under-performing assets, is not a critical reflection on the past.

“It represents a necessary rationalisation of the business in light of the changing consumer marketplace, reducing EU support, increasingly intense competition and relentless technological innovation.

“These necessary business initiatives will leave Dairygold better placed to respond successfully and profitably to the challenges ahead,” he said.