FBD to sell Passage East Ferry Company Ltd
The insurer is selling the ferry company as a going concern because it is a non-core asset for its business.

A ferry company, in which FBD Holdings plc owns a 70% share, is to be sold as a going concern.

The company operates a car ferry between Passage East in Co Waterford and Ballyhack in Co Wexford, and includes a 28-vehicle ferry and a commercial premises with offices, stores and a storage yard at Passage East.

FBD held a share in the business arising out of a legacy investment which is now considered non-core to the insurer. Founding shareholder and director Derek Donnelly is retiring from the business. David Kelly and Andrew Langford are the other two directors.

The company had a turnover of €1.6m in 2015, up 5% on the prior year. Earnings (EBITDA) has risen steadily over the past number of years, recording €587,000 in 2015, up 30% on the previous year.

The ferry operates seven days per week throughout the year, making an average of 106 sailings per day. It is mainly used by daily commuters and tourists during the summer months. The five-minute ferry crossing is estimated to save 90 minutes in journey time for round-trip commuters.

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The FBD rollercoaster ride

Ireland’s dairy industry rebalancing by investing in cheese processing
Glanbia’s cheese investment is the latest by the industry as it deepens in cheese to rebalance the product mix.

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.

Growth

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.

Comment

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.

Nestlé opens €27m R&D centre at Askeaton
The investment will expand on the existing R&D facility at Wyeth Askeaton in Limerick.

Nestlé officially opened its new research and development (R&D) centre at its Wyeth Nutritionals facility at Askeaton in Co Limerick this week. Following a €27m investment, the new centre will expand on the existing R&D facility at Askeaton, which focuses on developing product innovations for Wyeth’s infant formula and maternal nutrition business.

The Nestlé Wyeth facility at Askeaton produces a range of premium powdered milk-based products for infants, young children and mothers for export to world markets. In 2018, infant formula exports accounted for €1.1bn, or 25%, of Irish dairy exports.

“With this new centre, we will increase the pace of our innovation capacity by enabling our scientists to explore innovative nutritional solutions for the crucial first 1,000 days of life,” said Nestlé’s Thomas Hauser.

Wyeth manufactures about 40,000t of infant formula at its Askeaton plant and sources lactose, skimmed powder and other specialised dairy ingredients from a number of the Irish dairy co-ops.

Double digit growth in profits at Hilton Foods Ireland
Hilton’s Irish subsidiary is based out of a state-of-the-art processing and packaging facility in Drogheda, Co Louth.

Hilton Foods Ireland, the Irish subsidiary of Northern Ireland secondary meat processor Hilton Food Group, reported double-digit growth in profits for its 2017 financial year despite the negative impact of sterling volatility.

Accounts filed with the companies office show Hilton Ireland made pre-tax profits of just over €2.3m for its 2017 financial year, which was up 12% on the group’s 2016 performance. Hilton Foods Ireland, which operates from a processing and packaging facility in Drogheda, reported a 9% increase in sales for the year to €127.8m. The company makes all its sales in the UK and Ireland.

Operating profits in the business increased by 6% in 2017 to reach €2.4m, as operating profit margins were maintained at a steady 1.9%. Hilton said trading conditions in the meat retail sector remain “highly competitive”.

Hilton’s facility in Drogheda is supplied with primary meat cuts from Irish meat processors such as ABP and Dawn Meats. These cuts are sliced and packaged for sale in Tesco stores in the UK and Ireland.