The northwest-based co-op Aurivo is to invest €5m over the next three to four years upgrading its dairy ingredients plant at Ballaghadereen, Co Roscommon. This investment will allow Aurivo move into higher-value human nutrition ingredients, including dairy ingredients for the infant formula sector.
While no more capacity will be added, the investment will see the co-op position its product portfolio into more value-added ingredients with the highest quality and food safety standards.
CEO Aaron Forde said it further positions the co-op to meet global demand and anticipated market growth, particularly in relation to enriched dairy powders.
The development will upgrade the plant in four phases by 2020. The first phase has already started and will include a new customer research and development laboratory for product testing.
Forde said that the co-op has sufficient capacity to meet the expected increase in supply in the coming years. He believes that there is an opportunity to move up the value chain and this development work will allow the co-op to achieve this.
Milk price
Commenting on the milk price outlook, Forde confidently believes that a milk price in the range 30-32c is achievable for the full year 2017.
He cautioned that the rate of decline in milk supply had slowed in recent months across Europe, mainly as a result of milk price increases.
He also said that following steady increases in butter prices over the past year, the market is weaker, with butter now passed its peak pricing. He added that the large overhang of milk powders in intervention cannot be ignored.
Africa
With oil prices struggling to move above $50/barrel, this is having some short-term effect on dairy demand in oil-dependent economies in Africa. He is confident that the African market offers opportunities in the longer term. He said that when all of this is taken into account, it is keeping a lid on upward price movements.
SHARING OPTIONS