Malt recovery drives ingredients growth for Greencore

The company's ingredients side has moved from borderline loss to profit, with a 305 per cent increase in turnover for the six month period to €8.2m. For the comparable period of 2006 it was "unsustainably low". While all ingredient businesses delivered turnover and operating profit growth, recovery of the malt market played a major part in the turnaround. A company spokesperson told FoodNavigator.com that the malt market went through a difficult period as a result of over capacity, which led some key players to exit the market. But Greencore stuck with it, and is now reaping the benefits since, according to a company spokesperson, there is a slight shortfall in world capacity. Moreover there is a shortage of malting barley. The shortage is partly a result of growth in the biofuels sector. These two factors have combined to raise prices, which is beneficial to Greencore's malt business. The spokesperson was not able to give an indication of current prices. In fact, the two sides of the Greencore are contra-cyclical. If a prime material like malt is inflated, it is to the benefit of that business but presents a challenge to the convenience foods side, which uses it. However it was not enough to cast a shadow over growth in that area, where turnover was up 8.2 per cent to €478m and operating profit up five per cent to €31.8m. "The malt business is growing, but alongside a very, very strong convenience foods business," said the spokesperson. Greencore started life as the Irish sugar corporation. It was privatised in 1991, but by the end of the century it was becoming clear that changes to the EU sugar regime would present major challenges to its business. In an early bid to minimise the impact, it started moving more and more into convenience foods - a direction given a major push by its acquisition of Hazlewood Foods for €443m in 2001. Last year Greencore exited sugar altogether, closing its last remaining factory in Mallow. Greencore's convenience business presently accounts for 80 per cent of turnover. As well as Greencore Malt, which produces around 60,000 tonnes of malt a year from plants in Ireland, the UK and Belgium, other residual ingredients businesses include Drummonds (grains) and Trilby Trading (vegetable oils and fats).

Malt recovery drives ingredients growth for Greencore

Irish food group Greencore has reported impressive growth for its ingredients and agribusiness in the half year ended March 30, largely thanks to recovery of malt markets.

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