Minister for the Environment, Phil Hogan, opened a new €21 million investment at Glanbia’s Dairy Ingredients Ireland (“DII”) milk processing facility in Ballyragget today. It marks the culmination of a €107 million gross investment by DII since 2007.
Glanbia Plc took the opportunity to release an economic assessment undertaken by Ernst & Young that predicts an annual €510 million economic boost by 2020 arising from planned milk expansion by Glanbia and its milk suppliers who are currently preparing for the abolition of milk quotas in 2015.
However, it was made clear that this boost will not happen if farmers and other Glanbia Co-op members do not vote for a new joint venture project between the co-op and Glanbia Plc on November 13.
The joint venture (JV) would run milk processing ahead of the end of EU quotas on milk production in three years’ time. Under the proposal, the JV will be split 60:40 between the co-op and Plc, and a new milk processing plant will be built at Belview Port in the extreme south of County Kilkenny.
If the proposal passes the vote on the joint venture which requires a 51% majority, co-op shareholders will then vote on whether to reduce its holding in the Plc from 54pc to 41pc. The proceeds will be used to finance the co-op’s part of the joint venture and a share spin-out.
The Glanbia Ballyragget facility is one of Europe’s largest integrated dairy processing facilities and this investment in Whey Protein Isolate (WPI) is in response to growing global customer demand for what is the purest and most digestible form of dairy protein available – typically used in applications ranging from sports/ performance nutrition to high end clinical and infant nutritional formulations.
Commenting today, Minister Hogan welcomed the Glanbia decision to invest in innovation and value-add technology which both creates high end jobs and adds value to the milk produced by local milk suppliers. “The leadership shown by Glanbia Dairy Ingredients Ireland is further proof that the food sector can be central to rebuilding the Irish economy. Glanbia is Ireland’s number one milk processor and the third largest indigenous exporter. I congratulate the company on investing in this world class technology and securing high value, international markets for milk based nutritional ingredients. I also wish Glanbia well with its current proposal to create a new Joint Venture with Glanbia Co-operative Society which would facilitate an additional €180 million investment in a new facility at Belview, County Kilkenny and at existing facilities, supporting on-farm growth and creating a major jobs and economic boost locally and nationally.”
Glanbia DII currently employs 500 people, including 320 at the Ballyragget facility and expects to employ a further 70 if the proposed Joint Venture is approved and a new facility built at Belview, County Kilkenny goes ahead. (A further 450 people will be employed during the construction phase from 2013 onwards.)
The economic assessment undertaken by Ernst & Young predicts that the total impact of DII’s production operations on the Irish economy will increase from €1.54 billion in 2011, to €2.05 billion (post expansion) with direct and indirect employment from the business increasing by 1,850 to 7,500 full time equivalent (FTE) jobs.
Glanbia is proposing that milk expansion would be led by Glanbia Ingredients Ireland (“GII”), a new joint venture company to be owned by Glanbia Co-operative Society Ltd. (60%) and Glanbia Plc (40%). Ernst & Young’s analysis reports that investment by GII and milk suppliers would have a higher economic impact than Foreign Direct Investment (FDI) as all of the volume growth would be exported and because domestically sourced inputs form a significantly larger share of total inputs.
Speaking today, Jim Bergin, CEO of Glanbia Dairy Ingredients Ireland said the contribution of farmers and food processors to Ireland’s economic recovery is significant. “Glanbia’s milk expansion plans will create substantial employment and a much needed economic and export dividend. This will require investment by GII and farmers and also by Government to ensure that the Harvest 2020 targets are achieved, not least given that in the case of dairying every €1 investment is expected to generate a €2.00 economic impact. Perhaps most importantly, these expansion plans will also require the support of a majority of Glanbia Co-op members who will vote on the proposed joint venture on November 13th. If approved the planned €180 million investment at Belview and existing facilities will support on-farm growth and will provide a major jobs and economic boost locally and nationally,” Mr Bergin added.
Whey Protein Isolate (WPI)
Whey protein isolate (WPI) is the purest form of whey protein available, containing around 85% to 95% pure protein and also has the highest biological value (a measure of how fast your body can use a fuel source). WPI has applications in fat loss and muscle gain and is widely used in sports and clinical nutrition.
WPI is extracted through a process called “microfiltration” followed by a natural concentration and drying processes– which Glanbia pioneered and has perfected over the last 20 years.