Agri-food group expects trend to continue over next five years

Growth at agri-food group Glanbia plc was in double digits for the first six months of this year and the trend looks set to continue, according to group managing director John Moloney, who also predicted growth of between 10 and 14 per cent in earnings per share over the next five years.

"Glanbia is having a strong first half. Irish operations are performing well; international businesses are strong," he said.

Speaking at the group's annual general meeting (agm) in the Newpark Hotel, Kilkenny, he said the company was looking at two or three acquisition opportunities at present and had €150 million to spend, with €50 million of that already committed.

Mr Moloney said he expected Avonmore, the group's main consumer brand, to be the most recognisable brand in Ireland by the end of 2008 thanks to the television sponsorship deal on weather forecasts with RTÉ television, TG4 and TV3, which he said were bought at a discount.

Commenting on the company's plans in China, he said Glanbia was building a new vitamins and minerals premix facility to cater for the growing baby food market there.

He said there were between 250 million and 300 million people on the east coast of China who had the capacity to buy baby food, and the company had spent the past four years tapping into this market.

Mr Moloney said all global infant formula food manufacturers were building factories in the region and Glanbia was already doing business with them in Ireland. He added that he expected this trend to continue in south Asia.

Company chairman Michael Walsh told the meeting that the group's international businesses were doing well, particularly its US-based food ingredients business.

However, he said the group "has not yet been able to fully recover or counteract the dramatic price increases in milk-related raw materials".

Irish operations are performing well, Mr Walsh said. "Consumer foods is in line with expectations, although the retail sector remains highly competitive . . . Agribusiness is having a reasonable first half," he said, adding that the group's property business "continues to execute well".

"Global dairy markets are firm and the recent uplift in demand and pricing is providing a welcome benefit to milk suppliers. However, Irish milk processing margins remain tight and international dairy markets, while strong, will have increased potential for future volatility," he said.