Dairygold gets the cream with huge loan
ONE of the biggest milk producers in the country has secured the financing needed to expand production after quotas are removed in two years time.
Dairygold Co-op, which turns out a fifth of all milk in Ireland, said it has agreed a five-year banking facility worth almost a quarter-of-a-billion euro.
The facility increases the society's financial power from €100m to €250m.
The facility is seen as vital for Dairygold as it prepares for the end of quotas. The EU will remove caps on milk production then for the first time in more than 30 years, and Dairygold expects its suppliers to expand production by as much as 60pc.
Bank of Ireland led the syndicate running the facility, while AIB and Ulster Bank have also continued their relationship with Dairygold. British bank HSBC and the Dutch lender Rabobank complete the group.
Dairygold's chief financial officer Michael Harte said the new facility was "fundamental" for the co-op's "post-quota expansion plan".
"The plan involves a prudent and phased investment of €120m in processing capacity for the period 2015 to 2020 with an overall cost, including working capital and finance costs, in excess of €200m," he said.
Dairygold is one of a host of dairy businesses getting their houses in order ahead of the end of quotas.