Glanbia is on the lookout for a new region in which to “put down the flag”, the company’s managing director Siobhán Talbot has confirmed. In her first interview with the Irish Farmers Journal since assuming the role last November, she agreed that the US would be their “first port of call”, but nowhere would be ruled out. Interestingly, she added that in some cases, such as in Europe, it might be “an opportunity that Glanbia Ingredients Ireland Ltd (GIIL) would take up”.

“We are very comfortable with the partnership model. If we could find the right milk partner, we would be quite open to doing another model where we might build a large-scale cheese and whey facility,” she said.

Siobhán Talbot assumed the chief executive post in November 2013, succeeding the much-lauded John Moloney. She hasn’t been shy about coming forward – in their most recent annual results, she bravely forecast that the company would deliver “organic growth of 8% to 10% each year over the next five years”.

Glanbia is now effectively three companies: the publicly quoted Glanbia plc with a market value of €3.3bn; its 41% shareholder Glanbia Co-op, which is 100% farmer-owned; and its offspring Glanbia Ingredients Ireland (GIIL), which is a 60:40 joint venture between co-op and plc (see Figure 1).

All three are interlinked; Siobhán Talbot is chief executive of Glanbia plc and Glanbia Co-op, as well as being a board member of Glanbia Ingredients Ireland Ltd (GIIL). She made it clear that this will remain the case, even down to the names.

“What we’ve seen is that Glanbia as the first word in each name is very helpful internationally when talking to customers who value scale and capability,” she said.

No structural change

She dismissed any suggestion that the lower margin agribusiness and consumer business units would move from the plc to the co-op (as was planned in the first de-merger vote).

“I don’t believe that structural change is on the agenda,” she said.

She sees great potential for both units to leverage the Glanbia network globally. Agribusiness has recently begun exporting oats from its new food grade mill in Portlaoise, while a new 70m litre capacity UHT facility in Monaghan will allow the company to export Avonmore and Premier milk.

Meanwhile, the priority for Glanbia co-op will be to support members and GIIL. Despite assets worth €1.3bn, it will not be investing outside of its core shareholdings in GIIL (60%) and Glanbia plc (41.3%).

The co-op now has the means to support farmers directly.

“For the first time in many years, farmers have a co-op that is asset-rich and has cash on its balance sheet,” Talbot said.

“The board of the co-op is very clear that not all members are milk suppliers – that is why you will see the progressive dividend policy. If pinch points come, and members need support, at least they are in a positive position now. It’s always good to have options.”

In recent months, GIIL dropped its planned 2c/litre charge for “new milk”, which signals its ambition for farm output growth.

“Fundamentally we want to be able to encourage our supply base and they have responded very positively. What we have said is that the focus of suppliers should be on their on-farm expansion. It was also a statement of confidence by Glanbia plc and Glanbia co-op in GIIL.”

Many regard the move as Glanbia’s first step in expansion beyond its territory. Is there a risk of a new free-for-all?

“Our primary interest is in our own supplier base. You would hope that the key players in the industry will be sensible – we need to be sensible about doing things that encourage efficiency. There is enough folk on the global scene looking to compete against Ireland without us competing with ourselves, while at the same time recognising that they are different businesses. But we have many different alliances, recognising different business structures and if there is opportunity to do that again, I think for the Irish dairy sector that would make most sense,”said Talbot.

When asked if the opening of Belview would lead to some dairy plants in Ireland being under-utilised, she said that it would “create the opportunity to optimise the product mix across all plants”.

There is a “good collaborative mindset” across the industry and it would be to the benefit of everyone if that is sustained.

“We are very open to collaboration that is efficient. Our suppliers have the right to expect that – any collaborations that play to that theme, Glanbia will be up and ready to participate,” she added.

Would she foresee Belview partnering with one international company to produce infant formula?

“It will depend on the opportunity – we wouldn’t rule anything in or out. We have a history of building and sustaining strong relationships. We would be very mindful of maximising the opportunity that Belview presents.”

Strathroy

Siobhán Talbot was more guarded in her comments in relation to GIIL’s recent acquisition of Wexford Creameries and the loss of more than 10% of its suppliers to Co Tyrone-based Strathroy.

“As far as I’m concerned, it is all about going forward. We will be engaging with the supplier base.”

In hindsight, was it a mistake not to offer Wexford farmers a shareholding in Glanbia co-op?

“I haven’t a sense that it was,” she said. “Our job is to communicate as best we can and individuals will make their own decisions.”

Was she surprised so many switched to Strathroy?

“I would never comment on other organisations, only to say that I would urge suppliers to consider the long term. Glanbia has a long history and is very ambitious in terms of product, risk management tools and so on – things that can only be good for suppliers in the long term.”

Similarly, she refused to be drawn on how the Irish Dairy Board (IDB) butter plant that was destined for Belview is now heading for Dairygold Mitchelstown. She said that the Glanbia proposal to move the project from Belview to Ballyraggett was driven by lower cost.

“The board of the IDB has made a decision – we will respect that and completely support the implementation of that.”

Will it affect the relationship with the IDB?

“No.”

How is the relationship with IDB?

“Good.”