29 Aug 2012
GLANBIA PROPOSALS AMBITIOUS AND BALANCED – IFADairy
IFA President John Bryan has welcomed the ambitious and balanced proposals put forward by Glanbia Co-op Board to fund the Glanbia Plc/Co-op Joint Venture. He said the plans represented significant progress in sustainably returning dairy processing back into farmer control. On initial examination, the proposals went a long way towards minimising farmers’ legitimate concerns by ticking a lot of the boxes on issues such as the debt left with the proposed new entity.
Mr Bryan said: “The plans to build a state-of-the-art, stand-alone processing facility in Belview to facilitate expansion efficiently is welcome”.
John Bryan welcomed the extended period for discussion among shareholders and said the Association will take the time to get into the proposals in detail and consult widely with members affected over the coming weeks. In addition, IFA will seek independent advice on aspects of the deal as appropriate.
“The proposal to reduce the co-op shareholding in the Plc below 50% is a preferable approach to the alternative of high debt levels which could leave the new entity having to dispose of co-op assets at a later stage in less favourable circumstances. Also, it is critically important that all co-op shareholders can benefit: the spin out of €120m plus worth of shares gives farmers the option to hold the shares or sell them to help with expansion, or other financial needs.”
Mr Bryan said the new Glanbia Plc/Co-op JV must leave the door open to achieve greater integration and co-operation in the sector: “This proposal must be used to further progress detailed discussions on collaboration with neighbouring processor Dairygold and facilitate greater levels of constructive co-operation between those two processors and also with the smaller societies. Farmers will not tolerate anything less than the very most efficient use of their scarce resources,” he said.
IFA National Dairy Committee Chairman Kevin Kiersey added: “IFA has had this morning an initial internal briefing with of our elected officers in the Glanbia region to discuss the proposals, which were broadly welcomed”.
“However, there were many issues such as the position on future merchant credit from the trading division, dealing with future milk price volatility, and repayment of the revolving fund raised at the meeting, about which the Association will seek clarification.”