This week’s announcement by Glanbia Ireland will see it build one of the largest cheese factories in Ireland with a capacity of over 50,000t of cheese when fully operational.
This is significant not only in terms of the €140m investment but also in that it will be of a scale similar to the largest single cheese plant in the country – Carbery’s Ballineen cheese facility in west Cork which produces almost 25% of Ireland’s annual cheese output. It will also process a similar amount of milk to Carbery’s approximately 510m litres (2017).
But this cheese plant won’t be making cheddar, which Ireland has traditionally made.
It will concentrate instead on making continental-type cheeses such as Gouda and Edam.
This is particularly important in the increasingly likely event of a hard Brexit.
Currently, more than 50% of Ireland’s cheese exports – of which 83% are cheddar – are destined for the UK. In the event of a hard Brexit, cheese would be hit with a tariff which would see prices effectively double into the UK, making Irish cheese uncompetitive but also without a home as continental Europe doesn’t have much of an appetite for cheddar.
Glanbia Cheese, the joint venture between Glanbia plc and Leprino Foods, is investing €130m in a mozzarella cheese plant with a capacity of 45,000t in Portlaoise
Last year, Ireland produced around 220,000t of cheese with 190,000t of this cheddar. A further 55,000t was produced in Northern Ireland.
Glanbia’s new factory will add a further 25% to Ireland’s current cheese production. Well over 2bn litres of the Irish milk pool (around 30%) is now in cheese.
But it is not the only cheese factory coming on stream.
Dairygold is investing with Norwegian partner Tine in a €77m cheese factory which will have the capacity to manufacture up to 20,000t of Jarlsberg cheese.
Meanwhile, Glanbia Cheese, the joint venture between Glanbia plc and Leprino Foods, is investing €130m in a mozzarella cheese plant with a capacity of 45,000t in Portlaoise.
Last year, Glanbia completed a €35m investment in its Wexford cheese plant which doubled capacity. It produces around 20,000t annually.
The Irish Farmers Journal understands Carbery is finalising details around a significant investment it plans to make in Mozzarella cheese in Ballineen that would add a further 50% to its current cheese capacity.
Combined, these investments will rebalance Ireland’s product mix which had become more weighted towards powders.
Cheese also provides a steady stream of whey which can be further processed into higher-value nutritional ingredients such as whey protein concentrate (WPC) and whey protein isolate (WPI).
This plant, located at Belview, will by operational within four years. It doesn’t look like there will be any problem filling it, given the current rate of milk supply growth at Glanbia, which is up 42% since 2014.
Processing 2.7bn litres of milk, if this even grows at a modest 3% per year for four years, Glanbia will need at least an extra 340m litres of processing capacity. The new facility has a production capacity of 450m litres of milk per annum.
This investment is through a joint venture with privately owned Royal A-Ware Group based in the Netherlands.
The factory will produce blocks of continental-type cheese which will be exported for cutting and packing in the Netherlands.
Royal A-ware manufactures and distributes a variety of cheeses to retailers and food service customers across Europe.
Given the wave of investments in driers in the past five years it is welcome to see investments being made in cheese, which should bring balance to the product mix and hence the pricing of milk. By linking up with routes to market such as Royal A-Ware (Glanbia), Glaniba Cheese, Tine (Dairygold) or Ornua (Carbery), it allows the milk processors to concentrate on efficient processing without large amounts of capital tied up in marketing and distribution. It is an interesting model and one that seems to deliver for farmers.