Glanbia close to €374m joint venture deal for new US plant
Irish dairy producer Glanbia has announced it is in advanced discussions to build and operate a major new facility in the state of Michigan in the US.
The project is likely to cost in the region of $400m (€374m), sources told the Irish Independent.
It is likely to mean a contribution of $100m in cash from Glanbia, with its partners and debt funding the balance.
It is proposed that 50pc of the joint venture will be owned by Glanbia with the remaining half split between joint venture partners Dairy Farmers of America Inc (DFA), Michigan Milk Producers Association (MMPA) and Foremost Farms.
The plant is projected to process 3.6 million litres of milk per day. Glanbia will assume full responsibility for all commercial, technical and operational aspects of the business, while DFA, MMPA and Foremost Farms will supply the milk required by the plant.
“Glanbia is delighted to announce this exciting proposed project in the state of Michigan with DFA, Michigan Milk Producers Association and Foremost Farms,” said Brian Phelan, ceo of Glanbia Nutritionals.
“Consistent with Glanbia’s growth strategy, this proposed venture will build on our position as the number one producer of American-style cheddar cheese and simultaneously expand our global position as a supplier of advanced technology whey protein to the nutritional sector,” Mr Phelan added.
Darren McKinley, investment analyst at stockbroker Merrion Capital said: “We expect it to be a capital light investment which will deliver high returns on investment. Having acquired many brands over the last few years within their GPN division, this investment will help secure supply of their Whey ingredient.
Construction on the facility is mooted to begin in the second half of 2019.
Shares in Glanbia, which is headed by group managing director Siobhan Talbot, were up just over a third of 1pc at €15.58 each after the announcement.