JV processing plant given go-ahead despite continuing talks - Glanbia

Kilkenny County Council has given Glanbia the go-ahead to begin construction of the plant.

The Belview greenfield site development is, however, dependent on the outcome of on-going discussions between Glanbia and Glanbia Co-operative Society Limited – Glanbia’s majority shareholder.

The firms are in talks to create a joint venture (Glanbia 40%, the Society 60%) designed to develop Glanbia’s Dairy Ingredients Ireland (DII) business and boost its milk processing capacity in anticipation of the planned European Union (EU) milk quota abolition in 2015.

Member State milk producers have been allocated milk quotas since the mid-1980s in an effort to limit the supply of milk within the EU.

EU milk production is expected to increase by between 55% and 60% in the five years following the abolition.

Processing capacity​

Talks between Glanbia and Glanbia Co-Operative Society Limited concerning a joint venture are on-going.

But to ensure the potential joint venture is prepared for the 2015 milk quota abolition it was necessary for Glanbia to apply to local authorities for planning permission in July this year.

If the discussions between Glanbia and Glanbia Co-Operative Society Limited are fruitful, the Belview plant should be operational in time for the 2015 milk quota abolition.

The planned facility will have a processing capacity of 19m litres per week and will house two 7.5 tonnes per hour milk dryers. It will employ around 100 people once operational and an additional 400 temporary construction jobs could be created during the building of the plant.

Glanbia has also boasted of the planned site’s location – close to Belview Port, the nearest port to mainland Europe.

“Best way forward”​

“Glanbia plc, in common with its largest shareholder, Glanbia Co-operative Society Limited, recognises that Ireland has a range of competitive characteristics that facilitates growth in milk supply post 2015,” ​said a February 2012 statement from Glanbia.

A decision on the “best way forward”​ was forecast in the second quarter of 2012.

“Considerable progress has been made with the proposed transaction and while discussions are progressing well, it is now expected that these discussions will not be concluded before the end of August 2012,”​ said a July 2012 update.

It remains unknown when the discussions will be completed.