Dairy exporter Ornua’s €610m for further growth
By Joe Dermody
Dairy exporter Ornua has secured new five-year syndicated bank facilities totaling €610m to fund continued dairy industry expansion.
Ornua is Ireland’s largest exporter of primary dairy products, with annualised sales of €2bn in 110 countries. It manages exports of most of Ireland’s largest dairy processors, with the notable exception of Glanbia and Kerry Group, who manage their own overseas sales.
Donal Buggy, Ornua’s group finance director, said: “The successful refinancing ensures that Ornua retains access to the banking liquidity it needs to continue implementing our strategic five-year growth plan ‘Ornua2021’ following the removal of milk quotas in 2015, and delivering strong product price returns for Irish dairy farmers. Not only does it strengthen our capital structure, but it also provides continued working capital support to our member suppliers and ultimately the dairy community across Ireland. It is very pleasing to retain the same group of Irish and International banking partners; the deal was significantly over-subscribed demonstrating their continued support for Ornua and the Irish dairy industry.”
Ornua’s banking partners are the same as under its prior €420m facilities: AIB; Bank of America Merrill Lynch; Barclays; Rabobank; HSBC and Ulster Bank.
One part of the loan facility is made up of €260m in syndicated Revolving Credit Facility (RCF), including €60m of ancillary facilities to fund Ornua’s own working capital requirements and its global growth strategy.
Ornua also has access to €350m in a Reverse Invoice Discounting (RID) facility to fund the working capital needs of Ornua’s suppliers, Ireland’s dairy processors.
A further €100m is available, if needed, under the facilities (€50m under the RCF and €50m under the RID), via an uncommitted tranche of funding, which would bring the total RCF to €310m and total RID to €400m.
Last month, Ornua launched its Kerrygold butter brand into the South Korean market. Kerrygold had record annual retail sales of €900m in 2016, with volume growth of 20% in the US market; it is also the number one branded butter product in Germany.
Ornua has continued to deliver strong growth in international markets in 2017 across its Ornua Foods and Ornua Ingredients divisions.
Other highlights include the opening of an Innovation Centre in Chicago, Illinois, launching Kerrygold cheese in Singapore, the acquisition of FJ Need Ltd, a UK-based cheese ingredients company, and the announcement of a supply partnership with EasiYo, a fresh yogurt brand from New Zealand.