Farm Ireland

Saturday 16 December 2017

Danone plans a shot in arm for Dairygold

Declan O'Brien

Declan O'Brien

The announcement that Danone is to significantly expand its Irish baby food production operation is a real boost for Macroom and west Cork.

Let's face it, any new jobs announcement is good news in the current climate.

However, the benefits of the expansion plan will spread well beyond the beautiful banks of the Sullane.

An immediate beneficiary is Dairygold. The Cork co-op is the main supplier of whey to Danone's plant in Macroom.

Industry sources maintain that the volumes supplied by Dairygold will treble once the new facility is fully operational.

It is understood that the Danone contract will take up to half of Dairygold's total whey output.

This is a real shot in the arm for Dairygold, particularly when viewed against the expected increase in milk output once quotas are abolished in 2015.

Dairygold did not make an official response to the Danone announcement but a co-op source said the milk processor was delighted.

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"It is not so much the quantity or volume, it is the fact that this is a huge boost to Dairygold's standing and reputation," he said.

"To have the security of such a substantial contract from a world leader in the food sector is very satisfying," he added.

The Danone announcement is also significant in terms of the targets in the Food Harvest 2020 report.

If Ireland is to expand milk production by 50pc over the next 10 years, then identifying new outlets will be essential.

The fact that Danone has chosen to expand its Irish operation is also an endorsement of the Irish dairy industry as a whole.

The French-based multinational is a world leader in production of functional foods, yoghurt and baby nutrition products. If the firm is happy with its business here then we have to be getting some things right.

Indeed, at the Teagasc climate change conference earlier this year, Danone flagged its intention to expand its dairy processing facility here.

In an added boost for the Irish food sector, the company is also to develop a research centre of excellence at the Macroom site.

Minister for Agriculture Brendan Smith described Danone's decision to expand its operations here as very significant.

The Harvest 2020 goal of growing total milk output by 50pc over the next 10 years is a massive challenge.

However, securing contracts such as Danone's will offset some of the headaches associated with marketing the extra produce.

Irish Independent