Dairygold looking at €130m plan for Mallow
Funding arrangements in place for 15t/hr milk drier at 22ac site
Dairygold is eyeing up a €130m investment at their 22ac processing site at Mallow.
While it may be another eight weeks before the board at Ireland's largest dairy co-op approves the plan, projected costings and likely funding arrangements have already been laid out.
Dairygold CEO Jim Woulfe outlined his preference for a revolving fund, financed by farmers, to cover up to 30pc of the cost of the facility.
"It's not practical to leverage the entire cost from the bank," Mr Woulfe told members of the Agricultural Science Association (ASA) at a seminar in the Horse and Jockey hotel last week.
However, the Dairygold boss admitted that international banks had come knocking on the co-op's door looking to finance future expansion.
"We have the financial facilities in place to fund a €130m investment in Mallow over a 12-year period," Mr Woulfe said. "But the bottom line is that no matter where the money comes from, it will be the price of the litre of milk that will eventually make the repayments."
He believes that a 15t/hr dryer would offer the most economically advantageous option post-quota. While capacity would be built up in a two-stage process in tandem with increasing milk supplies, the ultimate goal is to process an extra 23m litres of milk over their current peak of 30m litres per week.
On the basis of a 60pc usage of capacity averaged out over a full year, this would enable the co-op to process an extra 700m litres per year.