Dairy business had good year

CARBERY’S Irish-based dairy business had a good year with solid margins and new business from both its cheese and ingredients divisions. 

Milk supply processed at Ballineen in 2016 was up 4.4% to 470 million litres. This was less than might have been expected, in the second year of the post-quota era, due to poor spring weather conditions and lower milk prices during the year.

The cheese division was affected by weaker pricing in 2016 and, as always, cheese price recovery was slower than other dairy categories. However, the Carbery cheese business is efficient and is benefiting from the strong innovation programme that the Group has invested in over recent years.

Carbery’s ingredients division also had a strong year delivering new business in high value areas such as infant nutrition and clinical nutrition.

Carbery launched its third Fixed Milk Price scheme for milk suppliers in December 2016. This scheme, which will run for three years, is designed to help farmers counter the ongoing volatility in dairy markets.

Synergy, Carbery Group’s international flavour and natural extracts division, reported strong growth in its key customer markets of the USA, South America, the UK, Europe and South East Asia. 

The business operates three sites in North America, one in Brazil, one consolidated site in the UK and a site in Thailand serving the South East Asia region. During 2016 Synergy continued to benefit from a positive growth strategy, significant investment and a strong focus on innovation and customer service. As well as driving organic growth, Synergy plans future growth through further acquisitions.

Commenting on the market environment during 2016, Carbery CEO Dan MacSweeney noted that, while dairy markets were difficult in the early part of the year as milk flows in Northern Europe grew strongly, the reduced milk flows late in the year had a positive impact with prices increasing. ‘This trend continued into 2017, however, market pricing for the second half of this year is still a challenge due to the current weakness in dairy markets in the last month or so,’ he said.