Farm Ireland
Independent.ie

Sunday 19 November 2017

Growth is the key to Lane's plans for IDB

TASTY READ: Chairman Michael Cronin and CEO Kevin Lane taste some cheeses at the launch of the Irish Dairy Board's 2009 results.
TASTY READ: Chairman Michael Cronin and CEO Kevin Lane taste some cheeses at the launch of the Irish Dairy Board's 2009 results.
Declan O'Brien

Declan O'Brien

A comprehensive assessment of all the Irish Dairy Board's (IDB) operations is under way, and the results of this evaluation will determine future investment decisions by the marketing body.

The assessment process began in mid-January and is to be completed by September.

Kevin Lane, who was recently appointed IDB chief executive, insisted that a "growth agenda" was central to the company's future.

He said the overall evaluation of the company's operations was a key element of this strategy as its findings would help identify investment opportunities.

"We have asked management at every subsidiary we own to look critically at their business at every level -- to identify their strengths and weaknesses and to predict where they see the business in three years' time," Mr Lane said.

The former Kerry Group executive, who hails from Brosna in north Kerry, said a targeted growth strategy was being put in place.

"We will focus on the sectors that can grow fastest and prioritise time and future investments accordingly," he said.

Acquisitions would also be on the agenda if the operations identified fit into the company's overall plans, he added.

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A three-year syndicated funding agreement for €250m -- with two Irish banks and four international lenders -- was secured by the IDB during the year.

IDB finance director Cathal Fitzgerald described this as a "vote of confidence" in the business, but he indicated that the package may have to be re-evaluated to match the company's expansion plans.

Mr Lane insisted that Kerrygold would remain at the core of the IDB business.

The board's Kerrygold brand performed particularly well last year and delivered record sales through its Irish operations and its wholly owned subsidiaries.

He said the aim was to hold the Kerrygold position in those markets where it had performed well and grow the business in weaker markets.

Identifying the next generation of Kerrygold products would also be a key priority, Mr Lane admitted.

"We will be working with our members on identifying new products which could be developed and marketed through the Kerrygold brand."

In terms of new markets, the IDB chief said Russia, China and Brazil were the three with the greatest potential.

However, growing sales in these countries would be undertaken in a structured fashion and would not be attempted "haphazardly," Mr Lane added.

"We would have to quantify the size of the prize, prioritise where the investment would go and decide how we were going to structure our operations before going into these markets."

IDB growth plans will have been helped by last year's results which were announced last week. Operating surplus at the dairy marketing body rose by €13.4m to €37.7m, up from €24.3m in 2008. This helped push profits back to 2007 levels.

A 12.8pc drop in IDB turnover reflected the difficult global trading environment for dairy produce last year. Turnover fell to €1.82bn, down from €2.09bn in 2008.

Irish Independent