Innovation at Linden Foods helps drive growth

Linden Foods, the red meat processing subsidiary of Northern Ireland's Fane Valley Co-Operative, saw a 43 per cent rise in the volume of retail sales through an investment in innovation and new facilities last year.

The growth was achieved from sales to both existing and new customers particularly in Great Britain. A combination of increased volumes, higher selling prices and strong export sales contributed to a 15.8 per cent growth in Fane Valley's group turnover to £429.76 million and an 80 per cent increase in pre-tax profit to £8.74 million. Fane Valley is headquartered at Armagh in County Armagh.

Trevor Lockhart, group chief executive described 2011 as 'a rewarding year' characterised by very strong global demand for meat and dairy products.

The opening of the new innovation and retail-packing centre at Linden Foods in Dungannon, County Tyrone was another highlight of the year within Fane Valley's red meat division delivering significantly enhanced capability in the added value retail sector.

Mr Lockhart said: "The focus on innovation within this business has ensured that Linden continues to bring forward new and exciting food solutions for its customers and we are targeting further growth in this sector." Together with the acquisition of Lonhienne s.p.r.l in Belgium by Irish Country Meats sales in the Linden Food Group increased by 14 per cent.

Whilst all divisions made a positive contribution to the overall group result Fane Valley Dairies performed particularly strongly. The increased imports of milk powder by China and Algeria during the first half of 2011 more than offset the increase in global milk output.

This underpinned a strong export trade and improved returns for dairy ingredients especially milk powders and butter. The resultant higher farmgate prices has since triggered a significant increase in milk output in all major milk exporting countries which has outpaced the continuing growth in demand. This has given rise to considerable uncertainty in dairy markets and milk prices will be weaker in 2012 as a result.

Looking forward Mr Lockhart said, "With supply and demand in developing economies now having reached a finer balance the returns from these markets are expected to be more subdued this year.

"Consumer demand in the UK and Ireland will also face continued pressure as the combined effects of a lacklustre economy and public sector austerity measures hits household budgets. Given this backdrop to the market and the continued cost inflation within the supply chain there will be even greater pressures on business in the current year," he added.