Glanbia Dairy Ireland joint venture underway
Glanbia plc and Glanbia Co-operative Society Limited have signed a non-binding memorandum of understanding for the sale of a 60% interest in Glanbia’s Dairy Ireland segment to Glanbia Co-op. Dairy Ireland is currently 100% owned by Glanbia plc and is comprised of two business units, Glanbia Consumer Foods Ireland and Glanbia Agribusiness.
Glanbia plc and Glanbia Co-op have agreed that they intend to form a new entity, Glanbia Ireland, which will encompass Glanbia Ingredients Ireland, Glanbia Consumer Foods Ireland and Glanbia Agribusiness, as a strategic joint venture, which will be 60% owned by Glanbia Co-op and 40% owned by Glanbia plc.
Commenting today, Siobhan Talbot, group managing director of Glanbia says, “The creation of Glanbia Ireland makes strategic sense for the shareholders of both Glanbia Co-op and Glanbia plc. It brings together in a single structure the ownership, operations and objectives of Glanbia’s Irish dairy and agri-businesses. With €1.5 billion of annual revenue and a 2.4 billion litre milk pool, it will be a large scale, efficient business with a high-quality supply chain and the strength and diversity to face the future with confidence. Glanbia plc will continue to focus on its global nutrition strategy through the platforms of Glanbia Performance Nutrition, Glanbia Nutritionals and Strategic Joint Ventures for the benefit of all shareholders.”
Dairy Ireland is currently a wholly owned segment of Glanbia plc. In 2016 Dairy Ireland delivered revenue of €616.2 million, EBITA of €30.7 million and an EBITA margin of 5%. Dairy Ireland, which accounted for 10.1% of Glanbia’s wholly owned EBITA in 2016, has two main businesses, Glanbia Consumer Foods Ireland and Glanbia Agribusiness. Glanbia Consumer Foods Ireland is a supplier of branded consumer dairy products to the Irish market, as well as an exporter of long-life dairy products. Glanbia Agribusiness supplies inputs to the Irish agriculture sector and is the leading purchaser and processor of grain and the leading manufacturer of branded animal feed in Ireland.
Dairy Ireland also has holdings in a number of associates involved in primary manufacture and distribution of farm inputs. All of Dairy Ireland’s manufacturing operations are based in the Republic of Ireland.
Jim Bergin, who is currently the CEO of Glanbia Ingredients Ireland Limited will be appointed CEO of Glanbia Ireland.
There are currently plans for a strategic investment programme in Glanbia Ireland of between €250 million to €300 million in the period between 2017 and 2020. This investment programme will increase capacity to support the stated growth ambitions of the Glanbia milk suppliers and optimise value adding opportunities. The financing of the investment will largely be sourced from dedicated bank facilities in Glanbia Ireland.
