Ornua, formerly the Irish Dairy Board, is hoping to hit €3 billion in sales in the post-milk quota era on the back of strong demand for new powdered products in Asia and Africa.
The group, which owns the Kerrygold and Dubliner Cheese brands, is Ireland's largest exporter of butter, cheese and milk powders, trading in 110 markets, and is likely to benefit most from the opening up of Europe's dairy trade.
Chief executive Kevin Lane told The Irish Times the company's revised five-year plan, agreed with the board, targets revenues in excess of €3 billion, which would represent a 30 per cent jump on the €2.3 billion it reported yesterday for 2014.
In preparation for the lifting of quotas, the group has been on a spending spree, acquiring seven companies in two years, including UK powder nutrition firm FoodTec for £1.2 million and Spanish cheese business Luxtor, for an undisclosed sum, last year.
As a result, Ornua’s latest set of accounts showed debt swelled to €99.3 million in 2014, albeit the balance sheet now boasts net assets of €436 million.
During the year, it opened a new plant in Wisconsin which marked the completion of a $80 million expansion of its US ingredients business. It also secured approval for the construction of a new €36 million Kerrygold butter plant in Co Cork.
Mr Lane said China and Asia represented an exceptional opportunity for the industry here but the group was not betting “on a single horse” and would continue to work at gaining market share in mature markets.
He noted the group enjoyed a 30 per cent bounce in US sales last year, where its cheese and butter products are sold in retail multiples like Kroger, Safeway and Whole Foods. Its agents conducted close to three million tastings in US stores to acquaint the consumers with Irish dairy products, he said.
Despite the collapse in milk prices , Ornua saw pre-tax profits jump 23 per cent to €28.1 million last year.
It acknowledged, however, that challenging market conditions continue to exist. Last year, a six-year boom in milk prices came to an abrupt halt on the back of oversupply and weakening demand with prices dropping by 25 per cent on average.
It said it had secured bank facilities totalling €420 million to meet domestic expansion and international growth requirements.
The group said it had over the past number of years been developing a global commercial infrastructure to take advantage of the post EU milk quota era.
Mr Lane said the possible re-opening of the Russian market represented an opportunity for the group. When the Russian embargo, in retaliation for Western sanctions over the Ukraine, was put in place last August, Ornua lost out on several million worth of dairy sales. He said the group remained optimistic that the ban would not be renewed when it runs out this August.
“All of Ornua’s investments are being made with a view to ensuring that high quality Irish dairy products are in the right international markets. This enables the business to continue to deliver a strong, sustainable return to the Irish dairy farmers we represent,” the group said in a statement.
