Ahead of the 2019 Balmoral Show, the Group Chief Executive Officer of Lakeland Dairies, Michael Hanley, has confirmed that the co-op is set to continue its sustainable growth as the largest buyer of milk in Northern Ireland (NI).
This year’s Balmoral Show is the first since the recent merger of Lakeland Dairies with LacPatrick Dairies. The merger has created the largest dairy processor in Northern Ireland and the second largest on the island of Ireland. Some 1.8bn litres of milk will be processed in 2019 from 3,200 farmers.
For 2018, Lakeland Dairies posted record sales of £733.6m which was up 5.3% on 2017.
This resulted in an operating profit of £15.8m, driven by strong returns from the three main business divisions, Food ingredients, Foodservice and Agri-Trading. This achievement was underpinned by significant economies of scale, benefiting from strategic investments of recent years in technology, automation and lean operation across the processing footprint.
“We’re very positive about the future at Lakeland Dairies,” said Michael Hanley, pictured, who has worked within the Lakeland Dairies group since 1986 having started his career at farmer advisory and progressing from there.
“We are coming off the back of our best ever financial performance and we are looking forward with excitement to the future. Lakeland is a strong and progressive dairy company,” Hanley said.
Looking more specifically at 2019, Hanley said the markets are reasonable but a number of factors are negatively influencing the market.
“We stand by our track record of being a top buyer of milk from farmers across Northern Ireland over the past 25 years. We constantly look to return the best price possible back to our farmers in line with market and currency conditions. Lakeland farmers are part of the largest dairy processor in Northern Ireland.
“The global dairy markets have become increasingly volatile in recent years. Market conditions for 2019 will be contingent on factors including the still uncertain impacts of Brexit and the overall balance of global supply and demand across our product portfolio as well as the euro – sterling fluctuations.
“We will always support milk producers to the maximum possible extent, and we will meet any potential headwinds by continuing to ensure efficiency and flexibility across all of our operations. We have excellent flexibility across our manufacturing footprint to divert milk into product categories that are in the most demand in order to yield the best returns from the market at any particular time.”
The merger of Lakeland Dairies and LacPatrick Dairies resulted in Lakeland becoming the largest buyer of milk in Northern Ireland with some 48% of the milk pool.
Lakeland Dairies now has the capacity to process over 200,000t of powders and 60,000t of butters as well as market-leading UHT, long-life and other dairy foodservice products across eights sites either side of the border. The merger with LacPatrick has also moved Lakeland Dairies into the consumer foods.
Michael Hanley says this scale as well as the broad and diverse range of products are critical in the current global dairy environment.
“Lakeland Dairies is about being efficient with every litre of milk we process. We have loyal and long-standing customers in over 80 markets across the globe. These customers are very interested in deepening their relationship with Lakeland Dairies and central to that relationship is the top-quality milk we receive from our farmers. We are building market share across our key product ranges and in our key markets. We will look to maximise all our products in these markets to return a strong price back to the farmer,” Hanley said.
Concluding, Michael Hanley said there are many reasons to look to the future with confidence while considerable work needs to be carried out as part of merging the two businesses.
“The outlook for the business and the co-op is positive. There is a genuine sense of optimism in the new, enlarged business and we look forward to working with all our suppliers and customers to carve out a positive future for all involved.
“We are currently working strategically to integrate the two businesses to drive efficiency and performance in every area of the consolidated business.”