Danone partnership helps boost Dairygold’s profit by 60 per cent

By Helen Glaberson

- Last updated on GMT

Related tags: Dairy giant danone, Milk

Danone’s decision to select Dairygold as its key supplier in its expanded Infant Formula Facility Global helped boost the ingredients supplier’s annual profits by 60 per cent to €18.9m last year.

Dairy giant Danone is to invest ​50m in the Infant Milk Formula plant in Cork, Ireland, which is expected to treble its annual production capacity to 100,000 tonnes, this should benefit Dairygold further with an increase in raw material requirements, the business said.

Uplift for dairy markets

Dairygold’s increased annual turnover of €693.6m, up €138.4m on the previous year, was also helped by improved efficiency and strong returns from international dairy markets.

The co-ops’s 2010 performance was particularly noteworthy in the context of increases in raw material costs, said Vincent Buckley, chairman of Ireland’s largest farmer-owned business.

The “dramatic turnaround”​ for international dairy markets during 2010 began at the end of 2009 and continued throughout last year, said the chairman.

Strong returns were due to consistently strong demand, particularly from emerging markets like China and a slow growth in international production volumes, according to Buckley.

The co-op paid a "market leading"​ milk price throughout 2010, up by six cent per litre over the course of the year, he said.

Forecast

In other future projections, Dairygold said global dairy consumption rates are forecasted to continue growing by circa two per cent year on year.

Any improvement in the economic climate in the developed economies will boost consumption levels and bolster global demand, said Dairygold.

“Russia, China and more recently India have become hugely important in determining global demand as they continue to create demand for dairy products that is not being met from domestic production,”​ said the co-op.

As the dairy industry is a low growth and volatile market, Dairygold said it is concentrating its processing on a product portfolio with a stronger growth and margin curve.

“Our investment programme has reflected that policy with dairy ingredients, infant formula and cheese solutions being the priority focus of our dairy processing capability,”​ said Dairygold.

Related topics: Danone, Manufacturers

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