On the Street -- Glanbia Expanding in U.S.

April 10/The Irish Times -- Irish food group Glanbia has announced an ambitious $90 million expansion of its U.S.-based Southwest Cheese business.

The expansion with U.S. joint venture partner, the Greater Southwest Agency, will increase the manufacturing plant's capacity by 33% and is expected to be commissioned next year. The move will enable the New Mexico site to produce 1.75 billion liters of milk, 181,000 tons of cheese and 12,000 tons of high-value-added whey proteins each year.

The development is expected to be largely funded by the business.

"From commissioning of the facility in October 2006 to today, this business has grown significantly to where it is now operating at full capacity. Against this background, and bearing in mind that markets for American-style cheddar cheese and high-protein whey product are growing, combined with consistently strong milk supply in the region, we felt there was a strong rationale for expansion," said Glanbia group managing director John Moloney.

Glanbia has consumer foods, agri-business and property divisions in Ireland, along with operations and joint ventures in Britain, the U.S. and Nigeria.

Moloney added that scale production was a key platform in the company's growth strategy. "Glanbia is very pleased with the progress of Southwest Cheese. We are confident that it will continue to grow and build on its successful track record."

The company announced an earnings forecast this year of low to mid-single digit growth. "Global dairy markets have weakened considerably from previous high levels. Food Ingredients Ireland will be the most challenged in this context and we expect this business to break even this year. Consumer Foods, Nutritionals and Joint Ventures Associates are expected to deliver robust performances."

Southwest Cheese chairman Mike McCloskey said he was positive about continued growth in the sector. "For our part, we are confident of an ongoing supply of milk from the region, and believe that the expansion is essential to grow the business further."

Separately, Glanbia yesterday published its annual report. It showed a 6.4% fall in remuneration to the company's top executives Moloney, retiring finance director Geoff Meagher and Kevin Toland, chief executive of Glanbia USA and Nutritionals. Executive remuneration totalled 2.65 million euros compared with 2.83 million euros in 2007.

From the April 13, 2009, Prepared Foods E-dition