Galtee boss warns meat plant costs must be cut

Dairygold chief executive Jerry Henchy yesterday confirmed that the co-op had substantially concluded its rationalisation programme but he warned that the firm would have to get costs in its Galtee Meats plant in line with its competitors if the division was to survive.

Mr Henchy said that, when Galtee Meats exited meat slaughtering with the loss of 170 jobs last August, the company had told the remaining 140 workers in the value-added pork meat processing side that costs would have to be brought into line if the company was to survive.

"We said to the remaining 140 workers that there is a future for Galtee but we have to get our procedures and practices and costs in line with the rest of the Irish industry - we weren't asking them to hit the levels of Denmark or Germany but those of our Irish competitors.

"We put proposals to them and they voted not to accept them, so we've got to look at how we get our costs and practices in line. We can't expect Galtee to survive with practices and costs that are significantly higher than our Irish competitors."

Mr Henchy admitted that the company still had to work out a means with its workforce of introducing the reforms, but he declined to put any time frame on resolving the impasse.

He also confirmed that rationalisation of the co-op's milk division was virtually complete with only the future of the its Mallow dairy processing plant not fully secure, although he remained confident for its future.

He also expressed satisfaction with the company's consumer foods division, as well as with its growing 4Home DIY and homecare business and the consolidation of all its administration at two offices - one in Mallow and one in Cork city.

Mr Henchy was speaking following an address to the Ireland-China Association in Cork yesterday morning, at which he outlined potential for growth for Dairygold in the Chinese market over the next 20 years.

Dairygold currently exports some $3-$4 million (€2.4-€3.2 million) of goods to China and the company expects to grow this business to $15-$20 million over the next five years, with the potential to increase it to $200 million over the next 10-15 years, said Mr Henchy.

Dairygold's operations in China are focused in three main areas: Beijing, Shanghai and a number of coastal cities south of Shanghai where the main infant formula market is concentrated, and this market looks set to expand significantly over the next 20 years, he said.