04 Jul 2012
IFA WARNING TO GLANBIA AND DAIRYGOLD: DON’T BUILD TWO PLANTS AT FARMERS’ COSTSDairy
Speaking after a meeting of IFA Dairy Committee and National Council members from the Glanbia catchment area held in Portlaoise last night to discuss Glanbia’s proposed Joint Venture plans, IFA President John Bryan said Glanbia farmers had given him two strong messages: Glanbia and Dairygold must not build two separate plants, and Glanbia must explore every avenue to minimise borrowing and debt for the planned new Joint Venture.
Mr Bryan said that it was good that some of the long-awaited information was now in the public domain, but much of the details involved have yet to be worked through by the Glanbia Co-op board, and will not be announced until after August. IFA will monitor developments, and continue to urge co-op board members in Glanbia, Dairygold and every other society to maximise co-operation and make the best and most efficient use of farmers’ resources in their plans for the development of the industry.
“There is ample evidence in New Zealand and the US, and from Teagasc research, that milk can travel long distances economically. It makes absolutely no sense to have Dairygold and Glanbia build two plants 100 km apart. Farmers want to see boards and management teams knock heads together over the coming months to make sure this does not happen,” Mr Bryan said.
IFA National Dairy Chairman Kevin Kiersey said strong concern had been expressed to him by dairy farmers about the possible level of debt the new Glanbia JV would have to carry. “For this project to be a success for farmers, it is essential that the funding, which has yet to be fully agreed, would result in minimal borrowing. Lumbering the JV with too much debt would make it very vulnerable in a volatile dairy market environment, and would challenge fundamentally its ability to deliver strong, viable milk prices,” he said.
“There are very positive aspects about the proposal, among those the greater control it would give farmers over dairy processing, and the strong proposed engagement by Glanbia, on a one to one basis, with expanding farmers to help them manage the challenges of growing their business. However, farmers have a great many questions and doubts about other aspects, such as the basis for production contracts, the level of contribution required from growth milk, etc,” he said.
“We urge all farmers to attend information meetings run by Glanbia, to ask many questions, and make their voices heard. We in IFA will continue to monitor the situation, and discuss and assess the proposals extensively through our Dairy Committee and County structure,” he concluded.