Glanbia buoyed by global dairy market recovery

Irish dairy giant Glanbia is predicting “very strong” first half of 2010 results, as its dairy ingredients business returns to profitability and the global dairy market recovers from the slump of 2009.

It said its Nutritionals business had performed well over the first half of the year.

“Operating margins for Global Nutritionals remain resilient, particularly in the context of ongoing investment in developing the Performance Nutrition brands,” the company said.

But it noted that the retail environment in Ireland and elsewhere remained competitive, with branded milk, butter and fresh dairy enduring a “very tough” year.

The figures for the half year ended 3 July 2010 will be published on August 25.

In Ireland, Glanbia said rising milk costs and reduced wholesale prices had put pressure on margins but figures had been boosted by the ongoing strong performance of the US cheese market, which performed much better in H1 2010, than 2009.

It continued to rationalise its Irish dairy businesses.

A €67m expansion of its Southwest Cheese facilitys in New Mexico had been completed and brought to operational capacity.

Glanbia in April considered selling its Irish dairy business to its majority shareholder Glanbia Co-operative Society for about €343m but the farmers who are members of the co-op rejected the deal narrowly at the last minute.

The Co-op holds a 54 per cent share in Glanbia Plc but could only muster 73 per cent support for the slpit when 75 per cent was required.

A total of 2970 members voted for the deal and 1097 against in a ‘one member, one vote’ ballot. Only 49 per cent of those eligible to vote did so – a relatively low turnout figure that may largely be explained by the fact that voting by proxy was not permitted.