Streamlined Glanbia ready for new health strategy

Related tags Milk

Irish dairy company Glanbia has taken a significant hit to profits
and turnover to restructure its operations around a more focused
ingredients and nutritional foods business.

But the streamlined group is now in better shape to go after acquisition opportunities in the nutritional ingredients sector, with improved operating performance, reduced borrowings and higher interest cover, up to 5.9 times from 4.6 in 2002.

Divestments in the UK, including the sale of Glanbia Fresh Meats Limited and other meat processing facilities and the recently announced sale of 75 per cent of its cheese business Glanbia Foods, contribute a large part of the €90.47 million exceptional costs that led to a net loss of €23.6 million by the end of the year.

Group turnover also fell as a result of reduced operations, by 11.9 per cent during the year, although better margins saw operating profit increase slightly (up 1.4 per cent) to €92.79 million.

The group has however now finished its three-year restructuring programme and made some headway towards its new strategy, which is centred around cheese, nutritional ingredients and healthy consumer foods.

It has begun work on a new R&D centre in Kilkenny, Ireland to develop innovative health foods and ingredients and also begun construction of a major $190m cheese and whey products production facility in New Mexico, USA. There are also new agreements for dairy ingredients in Latin America.

Despite being affected by the current environment and reduced turnover from the sale of some of its activities, the Consumer Foods business improved operational efficiencies in key businesses and saw new product extensions and introductions over 2003.

In Ireland the unit has launched a convenience 'grab and go' portfolio, including Avonmore 'SuperMilk on the Go' and the milk-based nutritional and functional beverage, 'Milk Plus'. It also markets the 'Yoplait Everybody' probiotic yoghurt drink.

Glanbia​ also has a strong presence in international dairy ingredients markets as the second largest producer of whey protein isolate worldwide and the largest milk processor in Ireland. The Food Ingredients and Nutritionals unit saw operating profit rise by 12.4 per cent in 2003, and operating margins increasing to 3.7 per cent. However results were impacted by the weakness of the US dollar against the Euro and weak US cheese markets in the first half of the year.

Glanbia's international nutritional ingredients activities are now being brought to market via a separate, focused business unit, which saw sales growth driven by new product introductions, such as the gut health whey product Salibra, launched in 2002, and currently being introduced into the sports nutrition sector in the US as a muscle development and sports performance product.

In 2003 the business commissioned new protein hydrolysiscapacity in the US and introduced two novel ingredients that extend the shelf life and improve the texture of nutritional bars - BarFlex and BarPro, both of which are partially hydrolyzed milk protein isolate, along with Prolibra, a weight loss solution.

Related topics Suppliers Dairy-based ingredients

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