Lakeland Dairies is on the look out for potential new acquisitions in the UK, Europe and the United States “to buy value to support the milk price”.
That’s according to the co-op’s group chief executive officer (CEO) Colin Kelly.
He told Agriland that future acquisitions will revolve around “the core of who we are and what we are”.
“We’re a dairy business that produces very high quality products on the back of the very high quality milk that is produced by our 3,200 farms.
“We won’t be buying coffee shops in New York.
“We will be very much staying within the space that we are in – we want to move up the value chain. In an ideal world the businesses that we buy will use Irish products and will use product produced from the milk produced on our farms 365 days year.”
According to Kelly, Lakeland Dairies acquisition of the Belgian-based butterfat business De Brandt Dairy International NV, which completed last month, is a “good example of that”.
The co-op acquired De Brandt’s customer base as well as other key assets of the De Brandt butterfat business in mainland Europe.
Kelly said this is a business that can take Irish product and gives the co-op a “wide footprint and reach to end use consumers”.
Lakeland Dairies
According to Kelly the key objective behind any new acquisitions will be to “enhance the future” of the co-op.
“We’re gearing ourselves to do different things, we will invest more in innovation over the next five years.
“We have a €100 million acquisition fund agreed with our board – what we ultimately want to achieve is to deliver sustainable prosperity to our dairy farm families. We’re going to be all about value over volume, capability over capacity and ultimately about being fit to grow,” he added.
The group CEO said it has a “little bit of work to do in terms of the foundation of the business” and its “operational footprint”.
“We need to add as much value as we possibly can to our product. We’ll do that through innovation and internationalisation – we want to mine as much value as possible out of the core business.
“We propose to invest in value added capabilities – it’s all going to be about moving up the value chain over the next five years as opposed to investing in capacity to process extra milk.
“We’re extremely positive on dairy, demand will be there over the next number of years, what we’re uncertain about is supply and I am sure that supply uncertainty is felt at farm level compared to anywhere else,” Kelly added.