Glanbia to open major new production plant in Michigan

Kilkenny-based food group enters joint venture with three US dairy co-operatives

Glanbia ’s new cheese and whey production plant will be able to process 3.6 million litres of milk a day, and will add 30 per cent to its processing capacity. Photograph: Eamonn Farrell/Photocall

Glanbia ’s new cheese and whey production plant will be able to process 3.6 million litres of milk a day, and will add 30 per cent to its processing capacity. Photograph: Eamonn Farrell/Photocall

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Glanbia has announced plans for a major new cheese and whey production plant in the US, which will add 30 per cent to its processing capacity.

The Kilkenny-based food group has teamed up with three US dairy co-operatives to build the new Michigan-based facility.

When fully operational, it will be able to process up to 3.6 million litres of milk a day.

Glanbia will own 50 per cent of the joint venture, with the balance shared by its partners: Dairy Farmers of America, Michigan Milk Producers Association and Foremost Farms.

The US co-operatives will supply the milk required by the plant while Glanbia will have responsibility for commercial, technical and operational aspects of the business.

If the project proceeds as planned, commissioning of the new facility is expected to take place in the second half of 2019 and be contributing to earnings by 2020, the company said.

Byproduct

Glanbia’s performance nutrition business, which is based on whey, the once-discarded byproduct of cheesemaking, has become the most profitable segment of the business.

On the back of best-selling brands such as Optimal Nutrition, BSN and Isopure, it is now the largest global player in the market.

The company’s US cheesemaking operation also forms a significant plank of the business. Its facility in Clovis, New Mexico, is also the largest natural cheese plant in the US.

Commenting on the announcement, Brian Phelan, chief executive of Glanbia Nutritionals, said the proposed venture would “build on the company’s position as the number one producer of American-style cheddar cheese and simultaneously expand our global position as a supplier of advanced technology whey protein to the nutritional sector”.

Milk pool

“This proposed joint venture is a strategic move by all the partners to benefit from the growing, large-scale milk pool in the State of Michigan,” he said.

Davy analyst Jack Gorman said: “The proposed investment is part of Glanbia’s broader strategy to secure access to cheese and whey production over the medium-to-long term.

“It follows the 2015 expansion in high-end whey capacity in Idaho and the ongoing expansion in cheese capacity at Southwest which will be commissioned in early 2018,” he added.

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