March 6/The Irish Times -- Dairy and nutritional ingredients company Glanbia will spend up to 200 million euros ($314 million) on acquisitions this year as it seeks to develop its interests in the high-margin specialist dairy ingredients industry.

The food group, which yesterday announced a 23% climb in pre-tax profits to 74.4 million euros ($117 million), said it had enjoyed "an excellent year" in 2007 despite facing a time lag in recovering the cost of higher milk prices in its Irish consumer foods division.

It attributed its performance to strategic investment in a greater spread of businesses, which meant it was also able to benefit from strong global dairy markets.

Glanbia group managing director John Moloney said the company was currently targeting two acquisitions, one in the U.S. and one in Europe.

It is investing in new regional sales headquarters in Singapore, while a new vitamins and minerals plant in Shanghai has begun taking orders from infant formula manufacturers.

Operating profits in Glanbia's consumer foods division fell 27% to 17 million euros ($27 million) before exceptional items, which included an exceptional charge of 20.4 million euros ($32 million) relating to its exit from the pigmeat industry.

Sales in the consumer foods division were flat overall, as a 6.7% growth in dairy and chilled foods sales was dragged down by a collapse in pigmeat revenues following a fire at its processing plant in Edenderry, Co Offaly.

Growth in consumer foods was driven by demand for value-added nutritional beverages, a market in which Glanbia's Avonmore brand is the leading player.

In its agribusiness division, feed volumes fell but by less than the market average, leading to gains in market share.

Turnover in the ingredients and nutritionals division, which includes its U.S. cheese business, soared 30% to 1.4 billion euros ($2.2 billion), with operating profits before exceptionals up 93% to 85 million euros ($134 million).

Moloney said Glanbia, the biggest supplier of cheddar-type cheese in the U.S., was capitalizing on the weakness of the dollar on currency markets.

"People have concerns about the dollar, but from our point of view, it is opening up new export markets from the U.S.," Moloney said.

From the March 17, 2008, Prepared Foods e-Flash