Carbery Group has received a €35m loan from the European Investment Bank (EIB) to support fund the construction of a €78m manufacturing plant, which it hopes will help Brexit-proof the business.
The EIB is the long-term lending institution of the European Union. It is owned by member states. This is the first ever EIB financing for an Irish agri-foods business.
Based in West Cork, Carbery is building the new facility in order to diversify its range of products and produce mozzarella for export to a range of international markets.
Currently its main focus is on the production of cheddar cheese, where it is heavily dependent on UK customers. This type of dairy produce would not generally be consumed in Asia and other areas where the co-op is expanding.
However, with the UK set to leave the European Union next year, uncertainty remains over what form of exit it will take, as well as the type of post-Brexit trading agreement that will be agreed between Britain and member states.
Jason Hawkins, CEO of Carbery, said: “Our latest investment is key for harnessing new international export opportunities and diversifying our product range.”
“The EIB backing, together with continued funding support from our other banking partners AIB, BOI, and Rabobank, will accelerate growth for Carbery and secure new markets for Irish dairy farmers,” he added.
Construction of the site at Ballineen, county Cork, is due to be completed next year, and the group is hoping to have its first produce from the facility on the market in 2021.
Once the site is operational Carbery’s cheese capacity will be in excess of 60,000 tonnes per year, and will continue to grow as milk volumes increase, the group said.
The producer of Dubliner cheese will still make a range of cheddar type cheeses.
The 12 year EIB loan to Carbery was formally agreed during a visit to the company’s headquarters by Andrew McDowell, vice president of the EIB responsible for agriculture and lending operations in Ireland.
Commenting on the loan, Mr McDowell said the investment by Carbery “demonstrates clear vision and resolve to continued international growth whilst addressing uncertainties related to Brexit.”
“This long-term loan represents the first direct EIB support for investment in the Irish cooperative sector in 45 years and the first Irish investment under the EIB’s dedicated streamlined agriculture financing programme,” he added.
Carbey is owned by four Irish co-operatives, Bandon, Barryroe, Drinagh and Lisavaird, and employs 700 people.
It operates from nine locations including Ireland, the UK, Italy, the USA, Brazil and Thailand.
Last year it reported increased sales of €423.5m.
The loan to Carbery is the first Irish investment financed under a €400m EIB streamlined agriculture and bioeconomy financing programme launched last year.
In 2018 the EIB provided €970m for new investment across Ireland.
Last week it signed a €35m loan deal with Cork County Council. It is the first part of an overall loan of €50m which was approved by the EIB. The aim of the funding is to support the council’s social sustainability investment programme.