Glanbia Cheese fights off dairy price volatility
In its annual results for the year to 31 December 2017, the mozzarella business, which is a joint venture between Glanbia and Leprino Foods, reported a 46.1% year-on-year increase in turnover, rising from £190m in 2016 to £278m. Its pre-tax profit rose from £10m in 2016 to £37.5m in 2017.
During 2017, the business invested £5.5m on new equipment at its Llangefini and Magheralin sites.
The business warned that volatility in dairy prices was a key challenge for them during the year and sought to mitigate this risk.
“The group is exposed to cheese and milk price risk as a result of its operations. The group manages its own and its customers’ exposure through a combination of long-term supply agreements with sales prices linked to milk prices or short-term sales price contracts which allow sales prices to be revisited following any major milk price movements.
“The group is well-placed with a continuous process of investing in the business, focusing on reducing costs, increasing capacity, and responding to changing product demands.”
Looking ahead, the directors at Glanbia Cheese said they expected the marketplace to “continue to be highly competitive, and expect overall margins to be challenging in 2018”.
In July, Glanbia Cheese announced plans to build a €130m (£115m) mozzarella cheese facility in Portlaoise, Co. Laois in the Republic of Ireland.
The new facility will have a production capacity of 45,000 tons per annum. Approximately 78 full time jobs will be created at the facility when it begins production in 2020. It will source the majority of its key raw materials from Glanbia Ireland and supply products to customers in the food service sector of the pizza category across Europe.
