Ornua aims to ‘guard’ milk price at 28-32c/L

Ornua plans to stabilise Irish milk prices after a long period of volatility, the group CEO has revealed after posting the company’s 2016 operational and financial performance earlier this week.

Ireland’s largest exporter of Irish dairy products, and the driving force behind the Kerrygold brand, delivered a strong trading performance last year, with increases witnessed in turnover, EBITDA and operating profit.

But, according to the group’s CEO Kevin Lane, one of its key roles is often “missed or misunderstood”.

“Over a 14-month period, milk price has gone from a high of 36-37c/L, down to a low of 22-23c/L and anything in between.”

Ornua’s job, he said, is to keep the guard rails for the Irish milk price in the 28-32c/L range and to avoid the massive peaks and troughs in the market.

This, he added, can be achieved through the use of risk management, hedging tools, trading expertise, the sale of value-added products and fixed milk price contracts.

The latter accounts for approximately 8% of all the milk purchased by the group and it aims to increase this to about 20% in the future.

Pictured at the announcement are (l-r) Kevin Lane, Chief Executive Ornua; Aaron Forde, Chairman; and Donal Buggy, Group Finance Director © Patrick Bolger Photography

Commenting on Ornua’s performance, Lane said: “2016 was a year of continued growth and we put a number of flags down around the world.

We invested in a number of new locations and, indeed, in a number of new manufacturing facilities.

He added that significant growth has been seen across brands including Dubliner, Pilgrims Choice and Kerrygold.

“Pilgrims Choice is the fastest growing cheddar cheese brand in the UK, and second in size.”

He also touched on the ambitious plans set out by Ornua in 2015 to make Kerrygold, which reached record global sales of €900 million last year, a €1 billion global brand by 2020.

“There are very few brands in the world that ever get to that size and scale. Kerrygold is absolutely heading there,” he said.