ICMSA recommends acceptance of Glanbia JV proposal
Following a meeting of ICMSA officers from the Glanbia region in Carlow last Thursday (1 November), John Comer, President of ICMSA, said that the Association has decided on balance to support the proposals put forward by Glanbia Co-op and Glanbia PLC and views them as a step towards ensuring that the additional processing capacity is put in place while also ensuring that the best possible milk price can be returned to farmers into the future.
“There is no doubt that the sector is moving into a period of opportunities but also serious challenges which people should not underestimate or ignore. Having reviewed the figures behind the proposed JV, it is ICMSA’s view that the figures do stand up to scrutiny and that a sustainable profitable business delivering a competitive milk price can be delivered through the JV with the opportunity for the Co-op to buy out the remaining share if it so wishes in the future”, said Mr Comer.
Mr Comer noted that there are various views amongst ICMSA members on this issue and key concerns include the 60% increase in production to meet the plants requirements, the delivery of a strong milk price and concerns regarding the pensions and debt issues. He noted that ICMSA has received assurances on these matters but that Glanbia needs to further reassure farmers on these issues. In relation to the pensions issue, Mr Comer observed that Glanbia has given ICMSA written assurances in relation to the JV obligations on the pensions issues going forward.
“The key concern for our members is the payment of a milk price that allows them to develop in a sustainable fashion. It is clear that there will be volatility in dairy markets in the future and based on our deliberations, we believe that the JV will be in a better position to deliver a milk price, but – like all businesses – this will be dependent on the management and board to deliver for farmers, particularly during periods of market downturn. Quite clearly, it is essential that the new entity is more aware of, and sensitive to, the pressures on dairy farmers and having discussed the matter minutely, we believe that it will be better than the current PLC structure in this regard”, said Mr. Comer.
ICMSA would encourage all its members supplying Glanbia to objectively assess the proposals and make their decision on this basis and from an milk suppliers’ perspective, ICMSA believes that supporting the proposal is the best course of action, concluded Mr. Comer.
Ends. 5 November 2012.
John Comer, 087-2057846
Cathal MacCarthy, 087-6168758
ICMSA Press Office