Morning business news - April 9Wednesday 09 April 2014 11.01
Farmer's co-operative Dairygold has reported a 33% increase in operating profit to €27.3m in its results published today. Revenues for the year rose by 16% to over €847m, while the co-op said that milk output was 4% higher at 959 million litres.
Jim Woulfe, the chief executive of Dairygold, explained that the business never went down the plc route and is owned by its 8,800 members. 3,000 of these are milk suppliers with the remainder involved in other agri enterprises. Mr Woulfe said that the results were very strong considering that farmers had to endure a sustained period of inclement weather throughout 2013. "It was a year of two halves on the weather front. The first five months were atrocious. We were importing fodder from the UK, France and the Netherlands. There was a turnabout in the second half with prescription type weather," Mr Woulfe said.
Dairygold farmers are now preparing for this time next year when milk quotas will be abolished. "Our farmers are forecasting an increase of 55 to 60% over their 2011 base. We estimate that will amount to about 550 million litres more to process by 2020." However, the industry is also readying itself for a period of volatility in milk prices. "That's the downside of the abandonment of quotas. We are entering an unregulated era when world demand will dictate price. Supply demand will influence prices. Volatility is to be expected," Jim Woulfe said.
Yesterday the International Monetary Fund identified the UK as potentially the fastest growing member of the G7 countries this year. Irish people, it appears, are making a fair share of the contribution to the performance. Gerry Collins, co-chair of the Irish International business network in London, said that recent research from Eulogy has shown there was a rise in the number of Irish directors of UK companies last year. That number rose to over 50,000 for the first time, so now 16% of all company directors there is Irish.
The report talks about the contribution by sales of UK companies with Irish directors at a "staggering" €317 billion.
Mr Collins said that Irish people are playing such a prominent role today in the UK due to a number of reasons, including the fact that during the 1980s and 1990s and up to down, emigration was led by highly skilled people. There was also an element of recession expansion, with the best of the Irish companies during the recession seeing the UK as the obvious first point of entry for their growth plans. He says the "peace dividend" over the past ten years has also been evident, with more of a focus on business connectivity between the Irish and UK governments. Lots bodies are now working together to make Brand Ireland more prominent in the UK, he adds.
MORNING BRIEFS - Toyota is to recall nearly 6.5 million cars worldwide. It is understood the recall relates to faults in the steering column, wiring harnesses or seat railings. It is not known if any cars here are included in the recall, but 825,000 cars across Europe are understood to be subject to the recall. The company will make a formal announcement in Japan later today.
*** German car manufacturer BMW is reportedly planning on a new plant in North America to cope with rising demand for its cars in the region. Bloomberg News has seen an internal memo to staff in which its production chief Harald Krueger says a decision will be made in the coming months. The company has been narrowing the list of locations, with at least two sites in Mexico reportedly being considered. BMW already has a plant in South Carolina which will soon become its largest facility worldwide.
*** Greece is widely expected to make a return to the long term debt markets for the first time in four years today. Athens is reportedly hoping set to sell about €2 billion in long-term bonds, its first such offering since its international bailout. Despite heavy losses just a few years ago, investors seem to want to get back in on the action. The Greek government saw its borrowing costs in a short-term auction fall sharply yesterday - a further sign that investor confidence is growing. The government raised €1.3 billion in a sale of six-month treasury bills at 3%, compared to 3.6% in March.
*** Minutes from last month's meeting of the US Federal Reserve will be published today. The meeting was Janet Yellen's first as chair of the Fed and it is hoped some light will be shed on her comments that the US would probably raise interest rates within about six months of the end of its quantitative easing programme.
That would timetable a rate hike for around the second quarter of next year.