Glanbia, the Irish dairy group, is to form a three-way partnership with Dairy Farmers of America and Select Milk Producers which will extend production of whey and cheese in the US market.
The $170 million (€150m) cheese and whey products production facility in western Texas will be 50 per cent owned by Glanbia with the balance jointly owned by DFA and Select.
Work on the facility is expected to begin in late 2005, and once the plant is fully operational it should generate sales of around $340 million a year, according to Glanbia. The Irish group will have full responsibility for operations at the plant and for the sale and marketing of products made there.
Once fully commissioned, the new facility will process over 1 billion litres of milk and produce 115,000 tonnes of cheese and 7,500 tonnes of high value added whey proteins annually. It is expected that the plant will also, over time, become the largest advanced whey processing facility in the Northern Hemisphere.
John Moloney, Glanbia's managing director said that the new plant was a significant step forward in the company's growth strategy, helping the group consolidate its position as the leading producer of American cheddar-style cheese and giving it a much stronger presence in the whey protein sector, a market with considerable potential because of the health benefits of the product.
The partnership with the two US companies will ensure that the plant receives sufficient supplies of milk, with both DFA and Select having significant operations in the south western US, the fastest growing milk producing region in the country.
Glanbia already has a major presence in the US market, where it claims to be the largest dairy processor in Idaho. Its global sales last year reached €2.3 billion.