Farm Ireland

Saturday 18 November 2017

Ornua results up as Kerrygold records global sales of €900m

Kerrygold recorded record sales of €900m in 2016
Kerrygold recorded record sales of €900m in 2016

Louise Hogan and Ellie Donnelly

Ornua has delivered earnings before interest, taxation, depreciation, and amortization of €43.1m for 2016, up 18pc on the previous year.

Ireland’s largest exporter of primary Irish dairy products saw turnover increase 9pc in 2016 to €1.7bn.

The result includes investment in new and existing facilities, a €6m increase in brand and market development, and what Ornua described as “the delivery of strong product prices to members.”

Kerrygold sales in particular were very strong, recording global retail sales of €900m in 2016, driven by a 20pc volume growth in the US and the successful launch of Kerrygold yogurts in Germany which had over 10 million pots sold in the first six months of 2016.

The group said that the aim was that the Kerrygold brand would become a billion euro global dairy brand in the coming years.

“Excellent performances in established markets such as Germany and the US were accompanied by continued expansion in our developing markets of Africa, China and the Middle East,” Kevin Lane ceo of Ornua said.

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Speaking on Newstalk  this morning Lane commented that Ornua’s milk suppliers were increasing their output which, he said, is why Ornua needed to increase sales in their current markets and develop new markets to allow for “sustained and continued growth.”

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“Ornua now exports to over 110 countries around the world. This strategy is ensuring our ability to continue to deliver for our members and for the Irish dairy industry, even in more uncertain market conditions,” Lane said.

Referring to Brexit, which Lane described as “one of the biggest medium-term risks”, he said that they would not know the full outcome of Brexit for two to three years.

Currently the UK accounts for approximately 25pc of Ornua exports and has a turnover of about €600m. While Ornua expects costs to increase as a result of Brexit, Lane said that he did not anticipate that WTO tariffs would be implemented. Should they be implemented it “would be a doomsday scenario” he said.

Oruna employs 950 staff in the UK, about 30pc of which are not British, which Lane said would present “challenges to the security of the work force.”

Responding to a question on the remuneration of senior staff at Ornua, Lane said that he hoped in light of the results that producers would appreciate that the remuneration package is correct.

Last year there were calls for more transparency in senior level pay in Ornua as under new financial rules it revealed top level pay within the exporter for the first time. It emerged executive pay in 2014 had stood at €4.8m and decreased to €4.4m in 2015.

The release of the full year results comes as the April Ornua purchase price index holds steady ahead of co-ops setting the milk price for farmers. 

The butter giant confirmed there were no plans to bring back the monthly dairy levy on milk producers that was previously collected to help fund the dairy export body.

A members bonus of €14.5m has been has been confirmed.

Ornua, which is owned in the majority by the country’s dairy co-ops, brands, packages and exports the dairy produce to over 110 countries worldwide.

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