From boardroom to farm; Martin Keane relishes the contrast

Glanbia works to put a lot of money back into farmers’ hands through dividends; top-ups; bonuses; and loyalty schemes, according to its group chairman, Martin Keane, dairy and beef farmer from Errill, Co. Laois.

One such initiative, he said, is MilkFlex.

MilkFlex is an award-winning loan product designed to provide dairy milk suppliers in the Republic with a loan product that helps protect farm incomes from the impact of dairy market volatility, seasonality and disease outbreak.

The MilkFlex fund is the first of its type in Europe and we received European Parliament recognition for providing this fund for members. Now the Government has facilitated the rolling out of this scheme to the whole country.

“We were pioneers in this initiative, which means that farmers who have had a difficult year, don’t have to pay interest on their payments.”

Unique Proposition

The Glanbia organisation has a huge ambition to grow internationally, capitalising on Ireland’s unique proposition around our grass-fed system, he said.

“If you look at the success of the Ornua Kerrygold brand’s footprint in Germany and the US, we have a unique proposition and we need to build on that.

“We have a huge commitment to sustainability, provenance and the family farm and we need to promote that in new markets and territories. Glanbia’s acquisition of Optimum Nutrition in 2008 was hugely significant,” commented Keane.

“From a plc perspective, we see ourselves as being a key player in the whole area of human nutrition, from infant nutrition to clinical nutrition. Different populations have different preferences, but they are not mutually exclusive.

“History shows us that, as wealth increases in populations around the globe, people tend to migrate from plant-based offerings to dairy. We see plant nutrition and dairy as being complementary.”

Glanbia plc’s announcement during the past week of a $350 million US acquisition is an indicator of the desire to move into new categories and add to its nutrition portfolio.

It has acquired US weight management firm SlimFast and other brands.

“It sites very nicely with our nutrition offering and the market in general,” Keane said. “Weight management and diet has become huge across all societies; in particular, across the States.”

Medical Profession

He believes that constant reinforcement is needed to get the message out that our dairy products are of the highest possible quality.

“The medical profession has moved through various thought processes on butter and cheese and the knowledge base that people have on the quality of dairy is improving.”

While a ‘great volume of noise’ is being made about vegan products, the proportion of the population involved is relatively small, he contended.

Young people tend to go through different stages of development and may try different propositions at different stages; but I see the sustainability and longevity as well as the quality and taste of dairy prevailing.

Having taken over the family farm and expanded it to 150ac, now working alongside his son, John, the Errill man has been on a leadership trajectory since finishing secondary school in Carlow.

He started out by doing a three-year apprenticeship farming training programme, gaining a certificate in farm management.

In 1979 he returned to the family farm which his father, who had previously farmed in Kilkenny, had bought.

“I got a few years before the quotas, and expanded. I now milk over 120 cows. I used to do calf to beef, but in latter years, it has been calf to stores,” he said.

Leadership

Strongly involved in Borris-in-Ossory Macra, he won a national leadership award in 1987. A former secretary of Borris-in-Ossory IFA for many years, he continues to be a member.

In the 1980s, he was involved in the setting up of the Donaghmore workhouse museum. “That site has a huge history, going back to the 1850s, and I felt we needed to capture it and tell the story; so it was a nice thing to do.”

Around 1984, Macra, in conjunction with the the Irish Co-operative Organisation Society (ICOS), and Avonmore (as it was called at the time), offered leadership co-operative training in a development programme that spanned a three-year period.

This ‘significant piece’ in Keane’s career saw him undertake the ‘intense’ training, which covered topics such as business and the co-operative model, with a study tour to Denmark at the end of the course. He went on to be president of ICOS, but retired from the organisation at the end of May.

He was elected to the board of Glanbia in 2006, to represent the Donaghmore/Monasterevin region.

“When you arrive in the boardroom, you’re there to give guidance and governance to the business,” he said. He recalled it as a ‘very exciting’ time from a business perspective.

Development

“We were coming up around the 10th anniversary of the merger of Avonmore and Waterford and a lot of development was going on. The organisation had settled itself and we were looking at the future shape of the business.

“I was fortunate to be on the board when we made the decision to buy Optimum Nutrition,” Keane said.

“We also saw the opening of Southwest Cheese in New Mexico, a 50-50 joint venture. It was very exciting; there was a lot going on,” he said.

In 2010 he was elected vice-chairman of Glanbia. “It was a big challenge to be moving to be an officer of the company. It brought with it added responsibility and workload,” he recalled.

In 2012 the organisation made the big decision to restructure the ownership of the Irish processing assets into a joint venture with the co-op and the plc. It was 60% Glanbia co-op owned and 40% Glanbia plc.

That was a hugely significant step. At the same time, the co-op was still growing its footprint in nutrition.

“There was a lot of business development and growth, as well as restructuring of the ownership of the Irish processing assets,” he said.

Difficult Year

On June 1 last, he took over as group chairman.

“There have been lots of challenges and opportunities. I have been kept busy. With the difficult year we have had, which has involved sourcing extra feed and fodder and the extension of the credit scheme that made €30 million available to members to cover purchases in July and August.

“In the last month we also brought out a fund equipment programme in conjunction with Finance Ireland, where people can avail of loans of up to €75,000. There is a three year loan for milk bulk equipment for upgrades of milking equipment, feed bins and the provision of generators.

The three year option has an interest rate of two and a half, and the five year option has an interest rate of three and a half.

“The aim is to make as cheap as possible funds available to upgrade equipment in extreme cases such as storms.”

Investments

Keane also pointed to the investment of €130 million by Glanbia and its US partner, Lepino Foods, in building a new mozzarella cheese manufacturing facility in Portlaoise – announced last July.

Another announcement this year was that St. John’s, Michigan, was selected as the location for a joint venture between Glanbia Nutritionals; Dairy Farmers of America; and Select Milk Producers Inc for a large-scale cheese and whey production facility.

“We are in the process of building an extra dryer at Belview in the port of Waterford in a €130 million investment to deal with the ambition of our milk suppliers to expand production. There is a lot going on, whether it’s in the plc or Glanbia Ireland.”

Family Farm

The role involves quite a bit of travel, and going from boardroom to farm is a process he relishes. “I’m on Glanbia business five days a week and I look on that as an extension of my own business.

There is no doubt that going from the corporate world to the family farm involves a significant contrast. Getting out on the farm and working alongside nature keeps me grounded in the reality of what farming is about.

“In the normal run of business, you can be very focused on strategy, development and expansion. It’s an absolute requirement that the board and the chairman take responsibility for policy and decision making. It is also vital to have that connection back to the members and farming,” he said.

“That hands-on piece keeps you in touch with the challenges that farmers face on a daily basis,” Keane concluded.

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