‘Brexit or no Brexit, the dairy sec­tor will ex­pand’

Lake­land Dairies’ CEO Michael Han­ley isn’t fazed by the prospect of the UK’s exit from Europe, writes

Irish Independent - Farming - - FINANCE -

THE dairy sec­tor will con­tinue to grow over the next decade and has the most pos­i­tive long-term prospects of all the Irish farm­ing en­ter­prises, Lake­land Dairies chief ex­ec­u­tive of­fi­cer Michael Han­ley be­lieves. And he doesn’t en­vis­age Brexit putting a brake on the cur­rent ex­pan­sion in the sec­tor.

And Lake­land, which has 2,400 farm­ing mem­bers on both sides of the border, will adopt a pol­icy of “mix­ing and match­ing” its pro­duc­tion ca­pac­ity in both the Repub­lic and North­ern Ire­land to meet any com­mer­cial sce­nario which a Bri­tish exit from the EU might present when the ne­go­ti­at­ing process is com­pleted, he added.

“Brexit or no Brexit, the Irish dairy sec­tor will ex­pand. The dairy sec­tor is the best farm­ing en­ter­prise in Ire­land and that will re­main the case whether we have a soft, hard, or drop­ping off a cliff out­come to the Brexit ne­go­ti­a­tions,” Mr Han­ley said at the of­fi­cial open­ing of the co-op’s new €40m ad­vanced milk dry­ing plant in Bailieboro, Co Ca­van.

The plant, which is one of the big­gest of its kind in Europe, will pro­duce 160,000 tonnes of milk pow­ders and 50,000 tonnes of but­ter an­nu­ally

Lake­land, which em­ploys over 800 peo­ple, is con­stantly re­view­ing its busi­ness op­tions in the light of Brexit, said Mr Han­ley.

But he em­pha­sised that while the UK was an im­por­tant and val­ued mar­ket for the co-op, they have cus­tomers in a fur­ther 79 coun­tries glob­ally.

These al­ter­na­tive mar­kets in Asia, the Mid­dle East, China and Europe were both prof­itable and ex­pand­ing and the com­pany will con­tinue to grow its non-UK busi­ness.

‘Baloney’

Mr Han­ley said a “lot of baloney” has been spo­ken about Brexit and he pre­ferred to await the fi­nal out­come be­fore mak­ing a judg­ment on how it might af­fect Lake­land.

His worst-case sce­nario would see the UK govern­ment adopt­ing a “cheap food” pol­icy which would turn the coun­try into a “dump­ing ground” for in­fe­rior agri­cul­tural pro­duce.

That would af­fect all Irish agri­cul­tural sec­tors from beef to sheep to milk and ingredients. But if the Bri­tish govern­ment pur­sued such a pol­icy, it was likely to be met with mar­ket place re­sis­tance from its own con­sumers.

In a gen­er­ally up­beat take on the cur­rent health of the Irish dairy sec­tor, Mr Han­ley said: “If I was a farmer want­ing to make a profit and ed­u­cate a fam­ily, I would be in the dairy sec­tor”

The ex­pan­sion at the Lake­land fa­cil­ity showed that the Irish dairy in­dus­try would con­tinue to ex­pand over the next decade.

The “heavy lift­ing” in terms of in­vest­ing in new “stain­less steel” to meet the com­pany’s ex­pan­sion plans was now in place with the com­ple­tion of the new fa­cil­ity. The co-op now has one of the big­gest milk dry­ing fa­cil­i­ties in Europe.

The ca­pac­ity of the plant to man­u­fac­ture ingredients has ef­fec­tively dou­bled.

Lake­land now has the ca­pac­ity to process over 1.2 bil­lion litres of milk an­nu­ally and con­vert this prod­uct into some 240 value-added dairy food ser­vice and food ingredients for the ex­port mar­ket.

“Our strat­egy is to cre­ate long-term com­pet­i­tive­ness and sus­tain­abil­ity for our milk pro­duc­ers to meet the long term needs of our cus­tomers in the global food in­dus­try,” added the Lakesland CEO.

“In par­tic­u­lar we are ad­dress­ing op­por­tu­ni­ties in the ar­eas of in­fant for­mu­las, dairy pro­tein foods and health re­lated nu­tri­tional prod­ucts.”

Mr Han­ley added that he ex­pects milk and in­gre­di­ent prices to re­main firm over the next few years.

PHOTO: COLM MAHADY, FENELLS

Lake­land Dairies’ chair­man Alo Duffy; Min­is­ter Heather Humphreys; Min­is­ter Michael Creed and Lake­land Group CEO Heather Humphreys at the open­ing of the Lake­lands €40m milk pow­der plant

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