Lakeland Dairies CEO expresses confidence for the future

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Michael Hanley, CEO of Lakeland Dairies, has released his New Year message to milk suppliers.

Lakeland Dairies is continuing to work competitively and successfully to underpin the future of dairying throughout Northern Ireland.

The investments we have made over the past decade have enhanced our capability and our efficiency where we are adding value to milk across the 240 different dairy products that we are exporting to over 80 countries worldwide.

While the markets and dairying conditions in general tend to be volatile on a cyclical basis, our production and processing platform is built on the core principle of achieving and maintaining long term sustainability in the best interests of dairy farmers. Trading conditions remained broadly positive during the year with a softening of the markets apparent in recent months due to increased global dairy production.

The prospects for dairy markets in 2019 are dependent on a balance of milk supply and demand in global markets.

In October the shareholders of both Lakeland Dairies and LacPatrick Dairies voted resoundingly in favour of the merger of both societies. This is subject to regulatory approvals in both the UK and in Ireland, which are normal and ongoing processes.

The combined organisation will be an international dairy food business of scale which will work to secure the future of our co-operative dairy farmer members for generations to come. It will deliver commercial benefits while processing increased volumes of milk and it will provide even greater capability to address global customer needs for high quality dairy foodservice, food ingredients and consumer products. We already have existing, well established commercial and operational strengths across this island, in the UK , Europe and worldwide. The merger will also serve to strengthen our UK market access in the context of Brexit.

Lakeland Dairies is well invested with modern facilities and technologies to process all milk sent to us by our milk producers. We are continuing to target strategic opportunities across key market segments including infant formulas, specialised ingredients, food manufacturing and health related nutritionals. We are fortunate to have excellent customers in every corner of the globe and all of these have long term demand for our dairy products. On several occasions each year, customers visit our sites and we also bring them to supplying farms where they are impressed by the high quality and commitment of our milk producers. That includes over 140 customers from the Middle-East and Asia who visited our facilities in Northern Ireland in recent months. We are confident of continuing success in these growing markets.

In September, HRH Princess Anne opened a new £5m high-tech product packing facility for Lakeland Dairies in Newtownards. This further underpins our export potential and market access for valued-added dairy products using milk produced in Northern Ireland.

The new facility enhances the capabilities of this major dairy processing site which plays a key role in our Foodservice Division. It is part of an overall £27m investment made in Newtownards over the past 10 years. It also follows the opening in 2015 of a major new Global Logistics Centre in Newtownards which is among the most technically advanced global export facilities in Europe.

The survey that we published during the year identified that 95% of Lakeland milk suppliers in Northern Ireland will stay in production for the future. In addition to farmers who have significantly grown their output, roughly half of Lakeland milk suppliers said they will further expand their milk production by over 3% in each year to 2022. This is a very positive signal. We are intent on supporting the ambitions of our milk producers through our own innovation and efficiency and in the services provided by our agribusiness and member relations teams.

In conclusion, I am very grateful to the Chairman, Board, Regional Committees, Milk Producers and Shareholders for their ongoing support and encouragement throughout the past year. I particularly thank my management team and all staff of Lakeland Dairies for their dedication and commitment.

This has been a historic and momentous year. Lakeland Dairies is a farmer owned and farmer controlled co-operative where the business is designed and built to create economic advantage for milk producers and shareholders. Our strategic priority will always be to achieve sustainable profitable dairy farming. We will therefore continue to drive competitiveness and overall growth as a constantly efficient and high performance business.