The document discusses how future expansion of Ireland's dairy industry will benefit the country. It is projected that milk output will grow 50% by 2020 due to the end of EU milk quotas. This will lead to €2 billion in additional export earnings and the creation of 15,000 new jobs. The dairy industry plans to invest €2 billion on farms and over €700 million in processing facilities. Exports to Asia, especially China and Southeast Asia, are seen as critically important to support the dairy expansion goals. Trade negotiations will be key to maintaining the competitiveness of Irish dairy exports.

1. Asia Matters
Asia Ireland Food and Agritech Forum
14 July 2015
Cork Institute of Technology, Cork
@asiamatters_biz #AsiaIrlFood @asiabizweek
In Food We Trust

2. 14 July 2015
Cork Institute of Technology, Cork
How Future Dairy Expansion Will
Benefit Ireland
Cormac Healy
Director, Irish Dairy Industries Association, Ibec

3. Cork Food & Agritech Forum
How Future Dairy Expansion
Will Benefit Ireland
CIT, 14 July, 2015

4. IDIA – who we are
The Irish Dairy Industries Association (IDIA) represents
primary and secondary dairy manufacturers including the
Infant Nutrition sector in Ireland

5. IDIA Membership

6. Content
How Future Dairy Expansion will Benefit Ireland
• Our dairy expansion plans
• The benefit to Ireland
• 2020 and beyond
• Importance of export – Importance of Asian markets
• Expanding export sales to Asia – challenges
• Summary

7. Irish Dairy Industry
Expansion
• FH2020 / End of EU Milk quotas
• Target: 50% growth in milk output
• Exports to grow to €5.5 billion
• Significant planning & investment (production, processing
& markets)
• €2 billion in on-farm Investment
• €700+ million investment in processing capacity and
value-add

8. Benefits to Ireland
• Investment spend – existing and future
• Increased export earnings – additional €2 billion
• Employment creation – 15,000 additional jobs
• Regional economic impact
• Low import content – strong multiplier effect

9. Hard Cash –
measuring the benefit
• An additional 2.75 bn. litres @ 32cpl equates to approx.
€900 million at farm-gate
• Export earnings growth of €2.0 bn. conservatively
• Key to value/contribution will be product mix for new milk
• Important factor in terms of dairy contribution is Irish
economic spend

10. Jobs Dividend
• Teagasc analysis of impact of post-quota dairy expansion
to Irish economy points to 15,000 new jobs
• On-farm & inputs/services
• Transport
• Processing
• Marketing
• Research & innovation

11. Additional benefits
• Building a competitive dairy sector for the future
• Infrastructure & expertise
• Driving innovation
• Ireland’s food reputation
• Building multi-nationals’ interest / FDI
Increased meat processing activity (+250,000 head from
dairy expansion) – equivalent to five meat plants

12. 2020 and beyond…….

13. Food Wise 2025 predicts that over the next decade Ireland can;
• increase the value of agri-food exports by 85% to €19 billion,
• increase value added to the sector by 70% to €13 billion,
• increase the value of primary production by 65% to €10 billion.
Dairy sector will be major driver

14. Export focus
• 90% export dependent (moving to 95%)
• Exports to 138 countries in 2014
• Additional volumes will be export focussed
• Increasingly looking to international markets
• China & S.E. Asia particularly important
• USA, Gulf and Africa

15. Irish Dairy Exports
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 e
€m
Source: CSO
*includes dairy enriched powders

16. Dairy Exports are more internationally oriented…..
Distribution by region 2014 (%)
0
10
20
30
40
United Kingdom Other EU Int. Markets
40
31 29
32
28
40Food & Drink Dairy
Irish dairy products were exported 138 countries in 2014

17. Irish Dairy Exports to China growing rapidly
0
50
100
150
200
250
300
350
400
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 e
Other
Whey
Butter & cheese
Milk Powders
IMF
€m
Source: CSO

18. Source: OECD & FAO Secretariats
Emerging markets driving global demand
0
10
20
30
40
50
Beef Pigmeat Poultry Sheepmeat Butter Cheese WMP SMP Fish
World Developing OECD
Global demand for livestock & fish products
(% Ch 2023 vs. 2011-2013 average)

19. China
33%
SE Asia
30%
Europe
4.1%
Global Consumption of Dairy Products to 2023
Total consumption to grow by 27%
Total Increase 2013-2023
Source: OECD FAO

20. Dairy Exports to China &
S.E. Asia
• Irish dairy exports amounted to €604 million in 2014
• Almost €400 million to China
• Strong growth reflected in sales other S.E. Asia markets
• Malaysia, Vietnam, Thailand…..

21. Two key Challenges
• Reputation
• Food safety & Quality
• Building recognition of Ireland
• Innovation
• Competitiveness – Trade Negotiations
• Grass-based milk production – comparative advantage
• Modern well-invested processing
• Losing ground on trade agreements

22. Brand Ireland

23. Trade Negotiations
• Two aspects to consider:
a) Direct benefit of reduced tariffs & removal of NTBs
b) Competitors moving ahead – NZ, Australia, TPP
• EU Trade negotiations:
Country Status
China Only an investment agreement
Vietnam Launched 2012. Nearing conclusion.
Malaysia Launched Oct-2010. Last round Apr-2012
Thailand Launched March 2013. 4 rounds.
Singapore Completed

24. • Dairy expansion making significant economic contribution
• Regional spread and low import content are major factors
• Future product mix will have bearing on scale of increase
value
• Export focus
• China & S.E. Asia are major demand growth regions and a
strategic focus for Irish dairy sector
• Reputation critical
• Trade negotiations – we can’t fall behind
Summary