Ornua continues expansion with Shanghai dairy manufacturer purchase

13-Jan-2016 - Last updated on 13-Jan-2016 at 13:53 GMT

Ornua is adding to its capacity by acquiring Ambrosia Dairy in Shanghai

Irish dairy cooperative Ornua has acquired the Shanghai-based dairy manufacturer, Ambrosia Dairy, which becomes its first manufacturing base in China.

Ambrosia supplies dairy products including sour cream, yogurt and speciality cheeses to the high-end retail and Food Service markets in the Shanghai region.

Ornua said that the acquisition will significantly increase Ornua’s access to the market and will provide an entry point to supplying dairy ingredients to the rapidly growing Chinese Food Service industry.

The Ambrosia facility will also include a new product development centre that will focus on developing cheese products that meet the specific tastes of the Chinese consumer.

Kevin Lane, CEO of Ornua said, “This acquisition is another important milestone in Ornua’s growth as a global supplier of quality dairy products. We are buying an excellent dairy enterprise which allows us to significantly grow our Chinese business in one step. It provides us with a manufacturing base in China and brings on board a team with local knowledge and expertise, complementing our own existing in-market operation.”

Targeting new markets for Irish dairy

The addition of domestically produced premium cheeses to the Ornua product range will complement the existing range of Kerrygold Irish milk products already on sale in China.

These products, which were introduced in late 2014 when Ornua was named the Irish Dairy Board, occupy similar shelf space in retail outlets, and the company says that the newly expanded product range will help leverage sales opportunities for Irish dairy produce in premium Chinese markets.

Ambrosia Dairy is the latest in a series of investments by Ornua, as it targets new markets for Irish dairy products. The last 18 months has seen Ornua invest in acquisitions and capital expenditure in Africa, Germany, Ireland, Saudi Arabia, Spain, the UK and the US. It comes just weeks after the opening of a new powdered milk packaging factory in Nigeria.

Sale leads to cash for members

A day after announcing the purchase, Ornua said that, following the December 2015 sale of its majority stake in DPI Specialty Foods, in California, it will pay an additional cash bonus of $16.2m (€15m) to its member suppliers, Ireland’s dairy processors.

This will be paid in April/May 2016, and will be in addition to the normal annual cash bonus paid by Ornua.