“We have the possibility to be something of a bridge to the EU for companies in the UK,” Donal O’ Sullivan, chief executive at Nutribio, told FeedNavigator.
“UK companies will be looking to continue their business in the EU as seamlessly as possible. Working with a manufacturing partner in Ireland will help them to do that – particularly in the event of a hard Brexit,” he added.
Working with a contract manufacturer in Ireland would enable companies to avoid tariffs and duties that UK-manufactured goods might be subject to when trading with other EU countries, explained O’Sullivan.
“It is easy for a UK company looking for an EU partner to work with an Irish company. There is no language barrier and the UK and Ireland ‘understand’ each other,” he said.
Milking the dairy market
Owned by Dairygold and Glanbia, which collectively contribute over six billion liters of the global milk pool, Nutribio’s core business is the manufacture of special performance products for ruminants, in particular, dairy cows.
“Our focus is on metabolic balancing through products that will improve the health and performance of animals by helping their immune systems and addressing issues such as heat stress,” explained O’Sullivan.
As well as making nutritional products for sale under its own labels, which include Immuboost and Ruminlix, the Cork company is a contract manufacturer, producing and packing products on an outsourced basis for brands such as Techmix and Tonosity. Nutribio also works with companies outside of Europe to help them enter the EU market.
At present, these high-value nutrition products are manufactured alongside commodity-based feed formulations for the domestic market. However, according to O’Sullivan, specialist nutrition is the company’s biggest growth engine.
“The new facility will give us more capacity to produce specialized, high-value nutritional products,” he said.
O’Sullivan predicts that 80% of the work handled by the new facility will be contract manufacturing for overseas clients, allowing Nutribio to expand its export business on the back of the investment.
Nutribio exports to about 40 countries, including Britain, France, Germany and Hungary.
Asked which geographies the company might target in future, O’Sullivan replied: “We follow where the milk is; strong milk producing countries are where we are focused.”
There is also an element of ‘Brexit-proofing’ to Nutribio’s expansion strategy.
O’Sullivan said that Brexit could be “transformational” for the Irish agri-food industry, for whom the UK market plays an important role.
“The Irish food industry sells a significant amount of produce into the UK, and post-Brexit, this could be affected by tariffs. This will have a dramatic impact on Irish farmers and a knock-on effect for us. We need something ‘off the island’,” he said.
Economies of scale
Expansion will also enable Nutribio to benefit from economies of scale when sourcing raw materials.
“We are a significant supplier into the Irish agri market. This will give us the economies of scale that come with being a good-sized buyer for feed ingredients on the world market,” said O’Sullivan.
The 20,000 sq. ft site in Little Island, near Cork, will be up-and-running by Q4 of this year. Although the facility will be much smaller in footprint terms than Nutribio’s main five-acre site, it will deliver a four/five-fold increase in its contract manufacturing capacity.
“We have been growing our contracting manufacturing business in the UK and other export markets, so we have already signed up some capacity,” said O’Sullivan.
He continued: “We have built in the capacity for four times the amount of specialist nutrition business we have today, and we would like to get there within three years.”