Glanbia set to spend up to €200m on nutritional expansion
GLANBIA could spend some €200m next year on acquisitions to boost the nutritional products business it has built up from the by-products of dairy produce.
Company managing director John Moloney said yesterday that the company would continue to focus on the global nutritionals business which has been so lucrative for the company, and would be the main driver of acquisitions next year.
"I would like to see that we'll have a bigger and well-resourced global nutritionals business," he said.
"By the start of next year, we should be able to spend somewhere between €150m and €200m" on acquisitions, he told Bloomberg News.
In recent years, Glanbia has followed Kerry Group in diversifying away from being a pure agri-foods business, and uses the whey produced in cheese manufacturing to make protein bars and drink shakes for weight trainers, as well as other lifestyle nutritional products.
The company, which bought Florida-based BSN in January, generates double the margins at its nutrition business to those at its dairy operations.
The nutritional business is the "key growth driver of the group", and the company is building a consumer brand through speciality retailers, Mr Moloney said. The company's health brands, used by bodybuilders and athletes, include Optimum Nutrition, BSN and speciality drink maker American Bodybuilding.
"That industry is growing at a rapid rate still and there is plenty of scope to grow it internationally," said Darren Greenfield, an analyst at NCB Stockbrokers. "Nutrition should definitely be the focus of the company for the shareholders."
"Part of the strategy is that you move up that triangle from large volume in cheese and base dairy processing to lower volume but higher value products," Mr Moloney said.
The nutritional business and US cheese posted an operating profit of €63.1m in the first half, with a margin of 10.4pc.