GLANBIA, THE producer of a third of Ireland's milk and cheese, told shareholders yesterday that profit is meeting analysts' estimates so far in 2008 after a "strong" first half for its food-ingredients and nutrition business.

Glanbia expects a "satisfactory" first half performance from its consumer foods unit, after passing on "significant" increases in raw material costs, the company said yesterday in an interim management statement ahead of the company's annual general meeting. Addressing the agm in Kilkenny, group managing director John Moloney, said the company expects to match last year's double-digit growth in 2008.

"We are having a good first half with individual divisional performances broadly as we would expect - recovery of margins in consumer foods, stable performance from agribusiness, margin maintenance in food ingredients Ireland, strong growth in food ingredients USA, good organic growth in nutritionals and an improved contribution from international joint ventures," Mr Moloney said. "While there continues to be a level of volatility in global dairy markets and there are still some uncertainties, as would be expected this early in the year, we are confident of meeting market expectations for the year."

Glanbia has spent almost €300 million ($464 million) since 2004 to reshape its business, much of that to build up the food-ingredients and nutrition unit that generates close to two-thirds of sales.

The company, Europe's largest supplier of cheese for pizzas, exited the pig-meat business this year. Glanbia is interested in buying nutritional food companies and could spend "north of €200 million" this year if it were to find a "suitable" purchase, Mr Moloney said in March. The company aims to increase annual sales to about €3.5 billion in three to four years, he said at the time.

Mr Moloney said his vision for Glanbia's future lies in the developing world and recent investments had positioned the company strongly for those markets.

"Western Europe is a saturated market with a declining net population," he said. "In west Africa, where there are developing economies and oil revenue, we see opportunity continuing to evolve. In China, we foresee a huge growth in dairy production but the market is increasing too. They're going to run out of road in terms of food and dairy production over time."

The company is also setting its sights on southeast Asia, and has recently opened a new sales and development office in Singapore.

Shareholders thanked chairman Michael Walsh, who is stepping down after 21 years on the board. - (Additional reporting: Bloomberg)