FDBusiness.com

Ireland’s leading dairy ingredients company, Glanbia Ingredients Ireland, has commenced production at its new, state-of-the-art nutritional ingredients plant at Belview in County Waterford, so completing a €200 million investment programme designed to increase processing capacity in readiness for the abolition of EU milk quotas.

Glanbia Ingredients Ireland processes1.6 billion litres of milk annually or 30% of Ireland’s milk pool into a range of dairy ingredients for export to more than 50 countries. The company is performing strongly with profits of Eur39 million.

Glanbia Ingredients Ireland supplies a range of ingredients to the infant formula market and exports enriched milk powder to markets including West Africa, Middle East and Asia in consumer-ready formats. It also sells a range of dairy proteins into the clinical and sports nutrition sectors. The company is one of the key Irish dairy processors supplying cheese and butter to the Irish Dairy Board (which is sold under the Kerrygold brand). Glanbia Ingredients Ireland currently employs 668 people across its five sites in Ireland and in representative offices overseas. The company has market bases in Ireland, Germany, the US, Dubai and Senegal.

Jim Bergin, chief executive of Glanbia Ingredients Ireland.

Glanbia Ingredients Ireland is a joint venture between Glanbia plc, the global nutritional solutions and cheese group, and Glanbia Co-operative Society, which is the main shareholder in Glanbia plc. Glanbia Ingredients Ireland is 60% owned by the Glanbia Co-operative Society and 40% owned by Glanbia plc. Glanbia Co-operative Society has an option to buy Glanbia’s 40% stake within six years. In the process of forming the joint venture in 2012, Glanbia Co-operative Society reduced its shareholding in Glanbia plc from 51.4% to 41.4%.

€180 Million Investment

Glanbia Ingredients Ireland’s new greenfield facility at Belview has literally broken new ground in the Irish dairy industry and set new standards internationally. “Some Eur180 million has been invested in our new nutritional ingredients plant at Belview, with support from Enterprise Ireland. It is the largest single dairy investment in the history of the State and the largest infrastructure investment by an indigenous company since 1929,” points out Jim Bergin, chief executive of Glanbia Ingredients Ireland.

The new facility will create 1,600 direct and indirect jobs, while contributing an estimated Eur400 million per annum to the economy – with particular benefit to farm families and rural communities.

The new plant has a weekly processing capacity of 19 million litres of milk. It has been designed to manufacture specialised milk powder products and nutritional ingredients to meet the demands of multi-nationals in infant formula and other industries operating in Asia, North Africa and around the world. Belview will produce concentrated skimmed milk, enriched milk powder, infant formula grade skimmed milk powder, infant formula grade whole milk powder and cream.

“Belview is a scalable facility that is also extendable. It is Ireland’s largest milk powder plant, and will produce high end ingredients produced to rigorous quality standards. A key feature for our customers is that we offer an owned and traceable milk supply from our farmer base of 4,800 suppliers,” Jim Bergin explains.

Belview will produce concentrated skimmed milk, enriched milk powder, infant formula grade skimmed milk powder, infant formula grade whole milk powder and cream.

Fast Track Project

The fast track project was delivered on time and on budget from ground-breaking in May 2013 to first processing of milk in December 2014. At peak more than 750 people were employed on the site. The safety record of the programme is commendable – approximately 1.5 million man-hours operated with only one HSA recordable incident.

The project brought together a broad range of global expertise and suppliers. In addition to Ireland, equipment was designed and supplied from countries across Europe including Denmark, France and various Eastern European countries, and from further afield such as New Zealand and China.

“The project also relied upon the support of a wide range of agencies and groups, without whom the project would not have succeeded – Local Government, IDA, Enterprise Ireland, ESB, Bord Gais and local residents, to name a few,” stresses Jim Bergin.

Advanced Design

The nutritional ingredients plant at Belview has been built to Infant Formula Spec and European Design Hygiene guidelines. The new facility is highly automated with a focus on best in class efficiency for water and energy usage and quality standards. There is also an emphasis on cleaning and re-cycling of water, as well as utilisation of some of the most energy efficient process equipment available. Heat recovery is a corner-stone of the plant’s design and operation, as is the operational model whereby energy inefficient processing (short periods) are avoided. Clean energy sources have also been utilised where possible.

“Thanks to cutting edge technology, the plant will produce a range of nutritional ingredients which are top quality and low micro, ensuring a suitable application across a range of infant and clinical nutrition industries,” he says. “Our low micro dry blend powders will be used in some of the world’s most recognised infant formula brands from Stage One.”

International Standing

Belview compares favourably with other dairies internationally in terms of scale, technology and environmental performance. With regard to the technologies utilised and planned efficiencies, the facility is best-in-class.

Equipped with two 7.5 tonne/hr dryers, Belview is comparable in size with other European plants of this type, although smaller than the large scale processing plants in New Zealand. The facility will process approximately 19 million litres of milk per week at peak.

Jim Bergin comments: “International expertise on hi spec builds was brought in to work on this project. Specifically, 3D modelling was utilised such that each and every component – floor, wall, pipe, valves, instruments etc – was modelled electronically and, thereafter, installed exactly in accordance with the model. This modelling allowed for the design to be fully reviewed and validated before installation, avoiding changes and providing assurances in relation to the safety, quality, operability and maintainability of the facility.”

Target Markets

The plant at Belview has been developed specifically for the export market with high growth developing regions in particular being targeted. It will complement the other sites within Glanbia Ingredients Ireland’s operations.

“The Belview site will allow us to develop a range of specialised infant formula grade nutritional ingredients which will enable a deeper penetration of the Nutrition and Health and Wellness industries which we already supply with our portfolio of advanced milk proteins,” he remarks. “These are currently produced at both our Ballyragget and Virginia plants alongside our enriched milk powders, butter, cheese, cream, and whey concentrates. We also recently acquired Wexford Creamery, which produces a range of cheeses, and through a joint venture in Carrick on Suir we make technical butters for the baking industry.”

Jim Bergin adds: “We are seeing significant growth in many of the industry sectors we supply into, particularly in the area of Health and Wellness. The clinical nutrition and sports nutrition industries are worth Eur16 billion and are currently growing at greater than 6% per annum.”

Additional Investment

A key feature for customers is that Glanbia Ingredients Ireland can offer an owned and traceable milk supply from its farmer base of 4,800 suppliers.

In addition to the establishment of the new nutritional ingredients plant at Belview, Glanbia Ingredients Ireland has also been modernising and expanding its existing facilities at Ballyragget in County Kilkenny and Virginia in County Cavan under a total investment package worth over Eur200 million.

At Ballyragget, Glanbia Ingredients Ireland has significantly upgraded its butter plant. The company has been processing butter since 1968, when the Ballyragget plant was first opened. “Remaining at the heart of the business ever since, we now have a wealth of experience to draw on across anhydrous milk fat (AMF), butter oil/butter oil fractions, salted and unsalted sweet cream butter, lactic butter and technical butter. Combined with our high quality, sustainable milk pool, this allows us to serve markets all over the world with exceptional butter ingredients and branded butter products,” Jim Bergin explains.

The Ballyragget facililty produces a range of butters, which are supplied to a range of global customers from branded retail butters such as Kerrygold through to top quality baked goods and biscuits. The new butter plant will facilitate a 45% increase in capacity from 55,000 MTs to 80,000MTs by 2020.

Ballyragget is one of Europe’s largest integrated dairy processing facilities. In 2012, Glanbia Ingredients Ireland also invested Eur21 million in a new whey plant at Ballyragget to consolidate the site’s leadership position into the future. “We are still witnessing increasing customer demand for whey protein isolate – which is a very pure form of whey protein, suitable for various nutritional applications,” he says.

New Milk Protein Plant

The nutritional ingredients plant at Belview has been built to Infant Formula Spec and European Design Hygiene guidelines.

At its Virginia site, Glanbia Ingredients Ireland recently invested Eur7.8 million in a new milk protein plant enabling production of the next generation of advanced milk proteins SolmikoHD and SolagoHD. Opened in December 2014, the new plant processes milk from counties on both sides of the border between the Republic of Ireland and Northern Ireland. The milk proteins are used by the global clinical nutrition, sports and consumer food industries. The investment at the plant will increase milk protein capacity from 4,000 to 10,000 tonnes.

In addition to producing enriched milk powders for export markets, the Virginia site is the only supplier of cream for the Bailey’s liqueur brand, owned by global drinks giant Diageo.

Development Strategy

Glanbia Ingredients Ireland has now completed the first part of its 2020 growth strategy designed to ensure the company is well prepared for the processing of an increased milk supply following the abolition of milk quotas.

Jim Bergin comments: “Phase 1 provided for a capital investment programme of Eur200 million in high spec processing infrastructure. Our new nutritional ingredients plant at Belview is the final piece in place of that capital investment outlay. Phase 2 is the development and expediting of our innovation agenda to drive the development of high spec ingredients for the Health and Wellness and Nutrition industries.”

Dairy Industry Outlook

So how does he see the outlook for the Irish dairy industry in light of the abolition of EU milk quotas?

“Quotas have been in place since 1984 and their removal at the end of March has the potential to radically transform Ireland’s rural economy. For the first time in 30 years, Irish dairy farmers can increase their production without having to purchase additional milk quota rights. The current farming generation has never known farming without quotas so this really is a generational opportunity,” he replies. “It represents a momentous juncture, not just for dairy farmers but for Ireland’s export economy.”

Jim Bergin draws a parallel with the situation in New Zealand, which like Ireland has a large dairy industry and grass-based system naturally suited to sustainable dairy farming. When milk quotas were introduced in 1984, Ireland and New Zealand both produced approximately 5 billion litres annually. However, in the absence of a quota regime New Zealand now produces 20 billion litres of milk annually.

“The removal of milk quotas gives Ireland a unique opportunity to increase milk production and bring an additional Eur1 billion into the Irish economy.” He continues: “The strategic ambition of Glanbia Ingredients Ireland is to grow in international markets, particularly in high growth developing regions.”

Strong Market Fundamentals

The market fundamentals are strong and the outlook is bright. Global consumption of dairy products is forecast to grow by 2% to 3% year-on-year until 2025. This is based on solid market demand that is built on sustainable global trends. He also points out that the earth’s population is expected to grow by almost 1 billion extra people during this period with the fastest growth rates in Africa and South East Asia.

Glanbia Ingredients Ireland’s new Milk Protein Plant at Virginia was officially opened by representatives from the Governments of the Republic of Ireland and Northern Ireland – Heather Humphreys, Minister for Arts, Heritage and the Gaeltacht, and Arlene Foster, NI Minister for Enterprise, Trade and Investment. Pictured (left to right) are: Liam Herlihy, chairman of Glanbia Ingredients Ireland; Heather Humphreys; Arlene Foster; and Jim Bergin, chief executive of Glanbia Ingredients Ireland.

Glanbia Ingredients Ireland will work through its global customer partnerships to target both developed and emerging markets. “For example, there are new and emerging middle classes with higher incomes in major markets such as China and the Middle East. There is increased awareness of the benefits of dairy products, westernisation of diets and a growing focus on health and wellness.”

Jim Bergin elaborates: “The new plant at Belview is also good news for other Irish dairy companies, as we have manufacturing contracts with eight other domestic processors which will be open to development or expansion from the Belview plant. Belview is a scalable facility and so it will also provide platforms for further collaboration in the industry.”

Green Credentials

The new plant at Belview along with Glanbia Ingredients Ireland’s other recent investments are expected to further enhance Ireland’s reputation as one of the best dairy producing countries in the world. “Ireland’s green credentials provide a differentiated positioning in the global marketplace where our grass-fed, pastured and family farm method of dairying produces a highly sustainable range of quality ingredients, making Ireland highly cost competitive. Glanbia Ingredients Ireland has prioritised sustainability as a key focus for its business,” he remarks.

Indeed, Glanbia Ingredients Ireland’s Belview, Cavan and Kilkenny facilities represent a major statement of intent by the company and on behalf of the Irish dairy industry. “The Belview site will see production and manufacturing on a global scale brought to the South East of Ireland and demonstrates our confidence in, and commitment to, our suppliers and the Irish economy.”

The Glanbia Ingredients Ireland chief executive concludes: “The Government support, through Enterprise Ireland, is a further, significant endorsement of this vision and a vote of confidence in the Irish dairy industry and indeed in Glanbia Ingredients Ireland and our milk suppliers. Up until now the only disadvantage Ireland has had in the dairy field has been quota-imposed supply restriction. The new era of dairy enabled by the removal of quotas at the end of March will allow us to break free of these shackles and significantly ramp up supply capability.”