On target for growth

Ireland’s agriculture and food industry was at a low point when the industry came together with various stakeholders in 2009 to devise an ambitious plan under the title, Food Harvest 2020.

Launched the following year, it set targets to increase the value of primary output in the agriculture, fisheries and forestry sector by €1.5 billion a year, a 33 per cent increase on previous levels. It also sought to increase the value-added element in the agri-food, fisheries and wood products sector by €3 billion and to achieve total exports from the sector of €12 million.

The plan was greeted with scepticism from some quarters, but the industry is now on course to achieve the objectives. The food sector is on a roll. Annual growth targets are being met and exports are already close to €10 billion. That’s before you consider the huge impact that the abolition of milk quotas in 2015 will have on the industry. Estimates suggest that this could result in a 50 per cent expansion of the dairy sector by the end of the decade.

Quotas, which have been in place for 35 years, have acted as a brake on the sector, but the industry is gearing up for expansion. Recent moves by two of the largest companies in this sector, Glanbia and Kerry, bear witness to this. Glanbia Food Ingredients is currently constructing a plant in Belview on the Kilkenny/Waterford border, which will create more than 1,600 jobs in a massive €400 million investment. Kerry is establishing a new plant in Kildare, with the creation of more than 1,000 jobs.

“We recently worked with Glanbia to quantify the impact of the growth in their milk supply,” says John Higgins of consultants EY. “Our analysis showed a pre-expansion economic impact of €1.54 billion which supported 5,592 jobs across the economy. The planned growth in milk supply is expected to boost those numbers by €509 million and 1,851 jobs respectively. As Glanbia processes around 28 per cent of the national milk pool, the economic impact of the national growth in milk production is clear.”

“Milk production has a significant impact nationally and at a regional level. The opportunities for growth due to the abolition of quotas are significant, with the impact heavily weighted to areas outside the major urban centres. All products from the extra milk production will be exported which further enhances the economic impact as there is no displacement effects in the domestic economy,” he adds.

Cathal O’ Donoghue of Teagasc agrees that quota abolition will have a huge effect throughout the food chain, starting at primary producer level. “The farm sector has huge pent-up possibilities. Around half of the land on dairy farms is not used on dairy production because of the quotas. The typical mid-sized family farm in Ireland is a very efficient producer and is set to reap rewards,” he says.

One of the reasons why Food Harvest 2020 appears to have caught the imagination of the sector is that it is very much an industry-led rather than a government-inspired initiative. Collaboration levels are high across the sector with a recognition that new technologies, innovation and closer working relationships through the chain are vital to exploit the possibilities in the booming global food market.

There is also a recognition within Food Harvest 2020, that growth in itself is not the only issue. Sustainability is vital and provides a competitive differentiator that could underpin the long-term success of the Irish food industry and enhance the “Ireland” food brand.

Sustainability: Irish Distillers

Irish Distillers commitment to sustainable development was one of the reason s it was invited to become one of the 10 founding participants of the Bord Bia Origin Green initiative, a voluntary programme that encourages Irish food and drink manufacturers to operate sustainably .

Sustainability is a key part of the culture of Irish Distillers according to its chief executive and chairman Anna Malmhake , who says responsible production and consumption are central to their business. The original Midleton Distillery in Cork, now a heritage centre , was built in 1825 in an area abundant with its two key raw materials : it was in the heart of the Munster cereal growing region and had water from the Dungourney River .

The current operating distillery is also based in Midleton and it produces two main types of Irish whiskey; pot still whiskey which is is distilled in batch process, and grain whiske y which is distilled in a continuous process

The company has embarked on a €100 million expansion project at its Midleton distillery which will see production capacity doubled.

Around 20 per cent of the €100 million investment is directly related to improving sustainability through reduced environmental impact, such as increased energy and water efficiency , and improved risk management.

Irish Distillers recently had its Jameson bottle redesigned so that it weights 30 per cent less. This has resulted in a saving of more than 435 tonnes of glass.

Also, some 98 per cent of all packaging waste from Irish Distillers’ bottling plant in Dublin is now recycled.

Sustainability: Samco Agricultural Manufacturing Ltd

The need back in the 1990s for a new way to grow maize in Ireland's cool climate has led over time to a successful company, Samco Agricultural Manufacturing Ltd.

The company developed a unique three-in-one maize planting machine that sets the seed, applies weed killer and covers the drill with a film of biodegradable material all at once, explains company director Robert Shine.

His father, Samuel ,developed the machine back in the mid-1990s so he could produce forage for cattle on the family farm in Adare, Co Limerick. But it was clear the machine would be just as useful to other farmers and so the company began.

They started manufacturing and began research on a suitable degradable agricultural film. "It acts like a mini greenhouse in effect, heat is trapped under the film to help seed germination. It can be used for soya, sweet corn, sorghum or sunflower," he says.

They have developed a number of films and are experimenting with a starch-based film to replace older versions. “We have about 10 different products developed here and made here and in China.”

Samco now employs 30 people directly and another 20 indirectly in support services, Shine says. It exports 80 per cent of what it produces with machines leaving Adare for Japan, China, New Zealand, Chile, Canada and the US, with recent annual growth of 15 to 20 per cent, he says.

Research and development remains central to what the company does, Shine says. "Forefront in our minds is R&D. We don't accept the notion that if it isn't broken don't fix it, we always try to improve our products."

DICK AHLSTROM