What's the verdict on new Glanbia company?

milkprofit

Some thoughts on Glanbia
Would the new joint venture be able to pay top milk price
Value of plc increased 700 m since last failed episode So why sell when increasing in value
At 60 %co-op-40 % plc we will not control our future
Will new JV carry too much debt

freedominacup

milkprofit wrote: »

Some thoughts on Glanbia
Would the new joint venture be able to pay top milk price
Value of plc increased 700 m since last failed episode So why sell when increasing in value
At 60 %co-op-40 % plc we will not control our future
Will new JV carry too much debt

1. They don't intend to. They will happily charge farmers for supplying milk to them in order to protect their margin. Glanbia plc will have first call on all of the output of the new JV esp from the proposed plant.

2. Exactly unless we sell it all and take our cash. We then have control over the situation. We invest our cash where we see the best return. Moloney wants a minimum of a 13% return on his investment but we are being coerced to invest in a JV with a 4% return. One of the reasons given for making this investment according to a plc board farmer member was because we liked milking cows. This was said at an information meeting in Dungarvan in July.

3. Yep the plan is to sell €200 million worth of shares to go from a 56% control situation to a 60% control situation. It's not being paranoid if the f**kers are really trying to get you.

4. The debt level doesn't look too bad it's the pensions liability that's the problem. I don't have the figures to hand but it seems to have gone from €15 million to north of €50 million in the past 4 months. I suspect the only we'll find the exact figure is if farmers make the wrong decision and we're left holding that particular baby. I can see us being forced to sell shares to cover this liability in the future. Don't be under any illusion that the plc wants us gone completely and the plan is a slow feed of our plc shareholding onto the stock market over the next 10 years until our shareholding is down to where we are just another shareholder. See Kerry for blueprints.

Viewtodiefor

milkprofit wrote: »

Some thoughts on Glanbia
Would the new joint venture be able to pay top milk price
Value of plc increased 700 m since last failed episode So why sell when increasing in value
At 60 %co-op-40 % plc we will not control our future
Will new JV carry too much debt

Why sell something that is increasing in value to buy into something that will be a big hole for cash for the next ten years? That is if it turns out not to be one big mistake.

Everyone needs to think long and hard before jumping into this venture that we don't know exactly how well it will operate forget about the cash incentive to vote yes and think long term is it the right decision. In my view no.

whelan1

from speaking to a few people round here, they are all voting no, you dont get a second bite at the cherry , they screwed up on valuations etc last time , alot of trust has been lost ... would take alot to turn it back round... glanbia meeting in darver castle october 2

freedominacup

whelan1 wrote: »

from speaking to a few people round here, they are all voting no, you dont get a second bite at the cherry , they screwed up on valuations etc last time , alot of trust has been lost ... would take alot to turn it back round... glanbia meeting in darver castle october 2

They're gonna be busy in the first week of October. They seem to be avoiding any large meetings in case momentum builds. They have carried on in the grand tradition of Glanbia/avonmore/Waterford boards with the valuations this time but they are going to be called on it big time.

whelan1

one point which we think should be raised is that no board member should be in place for more than 10 years..... after that they get too comfortable and in our opinion are not serving in our interests

filterstring

Make it 5 years instead .I am voting no anyway..

freedominacup

filterstring wrote: »

Make it 5 years instead .I am voting no anyway..

+1.

Make it that no-one is eligible for election if their financial and physical performance figures aren't at least in the top 5%. BTW this would exclude me totally.

whelan1

JOE REA USED TO SAY THAT PEOPLE THAT ARE ON A BOARD TOO LONG SUFFER FROM"CAP" SYNDROME, WHICH MEANS THEY HAVE THEIR CAPS OVER THEIR EYES AND ARE BLIND TO WHATS HAPPENING AROUND THEM - sorry about caps

FarmerWatch

Can we have a poll on this? Maybe something like
- yes for both proposals
- yes for 1st proposal but not second
- no for both proposals
- undecided

I'm still undecided and I'd like to get an overview of the feeling. Down my way there's a lot of people who can't make up their minds and a few definate yes men as well as a few no men. But those who have already decided have pretty strong opinions, I find here a great place to get a mixed point of view. I need more information so I'll be going to the meetings and the pension is an area of serious worry for me.

Tipp Man

Very Worrying that the general trend on here seems to be to vote no

Viewtodiefor

Tipp Man wrote: »

Very Worrying that the general trend on here seems to be to vote no

I agree tipp man that it is worrying as we need it sorted and move on but I believe the deal being presented is not in the best interests of the avg supplier, again it only looks after the vested interests of the plc. So why should we vote yes?? Oh ya they are giving us control of a low margin business saddled with a debt burden and a pension timebomb! No thanks!!

freedominacup

Tipp Man wrote: »

Very Worrying that the general trend on here seems to be to vote no

Really it's very worrying that the general trend on here is not much more strongly in favour of a no vote. As was said at a local meeting in my area if there were 1500 options on the table the one we're being presented with would be in the high 1490's on a scale where 1 was most ssuitable to farmers interests.

5live

Viewtodiefor wrote: »

I agree tipp man that it is worrying as we need it sorted and move on but I believe the deal being presented is not in the best interests of the avg supplier, again it only looks after the vested interests of the plc. So why should we vote yes?? Oh ya they are giving us control of a low margin business saddled with a debt burden and a pension timebomb! No thanks!!

That just about sums it up really.

Just one point though. Whether you like it or not, once you saddle the PLC horse you will at some stage get kicked off probably when you want it least. Find some way to retrieve as much control over the direction of your milk processing as you can while you still can...

Tipp Man

Viewtodiefor wrote: »

I agree tipp man that it is worrying as we need it sorted and move on but I believe the deal being presented is not in the best interests of the avg supplier, again it only looks after the vested interests of the plc. So why should we vote yes?? Oh ya they are giving us control of a low margin business saddled with a debt burden and a pension timebomb! No thanks!!

So once the quota goes the majority of milk suppliers want to increase milk - and new people want to get into milk.

To do that extra processing capacity (a fair bit of it) is needed - the PLC have said they will not put money into this as it will not make their required return rate

So it is all well and good saying the PLC is leaving us with the low return business - but we need to face reality - processing our Irish milk is low return - it needs major investment post 2015 if we want to increase - money needs to come from somewhere and its not coming from the PLC

Also farmers need to sit back and think a little - the share price of the PLC has risen from about 5.70-5.80 to over 7 euro on the back of this news - clearly all other investors feel the Coop is holding back the PLC.

The question is it better to have 40% of 5 billion company along with all the processing capacity we need or 53% of a 2 billion company and no extra room for expansion? Its a no brainer for me

Tipp Man

freedominacup wrote: »

Really it's very worrying that the general trend on here is not much more strongly in favour of a no vote. As was said at a local meeting in my area if there were 1500 options on the table the one we're being presented with would be in the high 1490's on a scale where 1 was most ssuitable to farmers interests.

Really do you really believe that??

Have the capacity to produce as much milk as we want by a farmer controlled coop while still having a 40% investment in a company with huge earnings and growth potential and you really think it's that bad

I wonder what some farmers really want

freedominacup

5live wrote: »

Just one point though. Whether you like it or not, once you saddle the PLC horse you will at some stage get kicked off probably when you want it least.

That's much too fatalistic. There's no point in controling a low margin business we'd be far better off out of it completely preferably with a healthy bank balance. This would at least put us in the driving seat in a meaningful way. The current plan is that we get to process on a very low margin and can sell to whomever we choose providing that we choose glanbia plc and accept whatever price they have on offer.

We either set out to take full control of the entire glanbia operation, (We already control around 70% with our private shareholdings and the co-op shares) or we dispose of all our shares as quickly as is profitable and use the proceeds to start processing from scratch or to buy the parts of the DII business we want on the open market. When one of the larger E.U. milk processors is bidding against us we'll know that we're in the ballpark on price. At the moment we're being asked to bid against ourselves. I've made this offer already I'll give them a fiver for the DII business. I have it in my pocket, it's a real bid and at the moment it's the only bid they have. All that the co-op needs to do is beat my fiver and I'd say they'd manage to get €6 in a whip-around at the next co-op board meeting.

freedominacup

Tipp Man wrote: »

To do that extra processing capacity (a fair bit of it) is needed - the PLC have said they will not put money into this as it will not make their required return rate

Also farmers need to sit back and think a little - the share price of the PLC has risen from about 5.70-5.80 to over 7 euro on the back of this news - clearly all other investors feel the Coop is holding back the PLC.

The question is it better to have 40% of 5 billion company along with all the processing capacity we need or 53% of a 2 billion company and no extra room for expansion? Its a no brainer for me

There's enough processing capacity in Glanbia to handle at least the first couple of years expansion the timelines are not anything like as tight as we are being told. You are full of contradictions you want no control of something you say will deliver good returns but want to take slightly more but still partial control of a business that will only serve to jeproadise your valuable investments.

Honestly concern for other investors has gotten us into this mess. The other investors simply see this as an oppurtunity to fleece the suppliers further. The main reason for the spike in share prices is that this proposal is so heavily skewed in favour of the plc.

In your wisdom as an astute investor how much is a company generating €23 million in EBITA worth especially one with a pensions liabiltiy that has become a bit of a movable feast, every time the plc board are questioned on it the hole gets bigger. It's after doubling and more in the past 4 months.

Tipp Man

freedominacup wrote: »

There's enough processing capacity in Glanbia to handle at least the first couple of years expansion the timelines are not anything like as tight as we are being told. You are full of contradictions you want no control of something you see will deliver good returns but want to take slightly more but still partial control of a business that will only serve to jeproadise your valuable investments.
.

Like hell is there enough processing capacity - there isn't enough processing capacaity at the moment. There is a huge amount of Glanbia milk being transported all over the bloody country because they can't even handle what they have - see Dairygold, Tipperary, Wexford as some examples of this

So I ask again where is this extra processing capacity going to come from? Who is going to pay for it?

Viewtodiefor

Tipp Man wrote: »

Viewtodiefor wrote: »

I agree tipp man that it is worrying as we need it sorted and move on but I believe the deal being presented is not in the best interests of the avg supplier, again it only looks after the vested interests of the plc. So why should we vote yes?? Oh ya they are giving us control of a low margin business saddled with a debt burden and a pension timebomb! No thanks!!

So once the quota goes the majority of milk suppliers want to increase milk - and new people want to get into milk.

To do that extra processing capacity (a fair bit of it) is needed - the PLC have said they will not put money into this as it will not make their required return rate

So it is all well and good saying the PLC is leaving us with the low return business - but we need to face reality - processing our Irish milk is low return - it needs major investment post 2015 if we want to increase - money needs to come from somewhere and its not coming from the PLC

Also farmers need to sit back and think a little - the share price of the PLC has risen from about 5.70-5.80 to over 7 euro on the back of this news - clearly all other investors feel the Coop is holding back the PLC.

The question is it better to have 40% of 5 billion company along with all the processing capacity we need or 53% of a 2 billion company and no extra room for expansion? Its a no brainer for me

So we take the deal, gather our little cash sweetner Glanbia is offering for d shares, have a nice holiday r a new car r reinvest it whatever floats ur boat! build the plant ,have the debt of all that, oh ya I forgot the pensions which could be another 59million nobody knows as no straight answers given!

Now extra capacity?? And expansion? So supplies go up 50% oh yea great weather in USA and new zeland for next 3 yrs production there flies ahead and china this great place we keep hearing about is suddenly in turmoil after global consumption of it's goods collapses on the back of Hugh austerity in USA and Europe, it's demand for dairy falls, as a result milk price plummets and d poor old farmer co op after spending all their money building the plant selling to Glanbia, they say sorry lads can't sell d milk at price in d plan look at the world market that's the price farmers paid 18cent a liter for milk! HAPPY DAYS !!!

Co op indebted pension timebomb farmers can't pay bills etc etc.

I don't need to listen to dis ****e about more capacity n new guys coming in ( a guy in milk with yrs can't get quota but it's given to a new entrant) the whole thing is total bo***cks . Wit vested interests looking after themselves as usual.

Tipp Man

Viewtodiefor wrote: »

So we take the deal, gather our little cash sweetner Glanbia is offering for d shares, have a nice holiday r a new car r reinvest it whatever floats ur boat! build the plant ,have the debt of all that, oh ya I forgot the pensions which could be another 59million nobody knows as no straight answers given!

Now extra capacity?? And expansion? So supplies go up 50% oh yea great weather in USA and new zeland for next 3 yrs production there flies ahead and china this great place we keep hearing about is suddenly in turmoil after global consumption of it's goods collapses on the back of Hugh austerity in USA and Europe, it's demand for dairy falls, as a result milk price plummets and d poor old farmer co op after spending all their money building the plant selling to Glanbia, they say sorry lads can't sell d milk at price in d plan look at the world market that's the price farmers paid 18cent a liter for milk! HAPPY DAYS !!!

Co op indebted pension timebomb farmers can't pay bills etc etc.

I don't need to listen to dis ****e about more capacity n new guys coming in ( a guy in milk with yrs can't get quota but it's given to a new entrant) the whole thing is total bo***cks . Wit vested interests looking after themselves as usual.

whether you like it or not supplies are going to increase dramatically - might not reach the 50% but they will surely be pretty close

Now i am asking again how are we going to process this?? Because regardless of USA, NZ or China this increase is going to happen in Ireland and in Glanbia

On the debt the JV could be DEBT FREE by 2017 and it could be 100% Coop owned within 6 years. So by 2020 Farmers own 100% of their processing rights debt free and 41% of a very profitable and growing PLC and farmers will receive PLC shares as well

(note i'm not saying that increasing cows is the be all and end all but it is a reality of what is going to happen and i agree re your new entrants point)

Viewtodiefor

Tipp Man wrote: »

Viewtodiefor wrote: »

So we take the deal, gather our little cash sweetner Glanbia is offering for d shares, have a nice holiday r a new car r reinvest it whatever floats ur boat! build the plant ,have the debt of all that, oh ya I forgot the pensions which could be another 59million nobody knows as no straight answers given!

Now extra capacity?? And expansion? So supplies go up 50% oh yea great weather in USA and new zeland for next 3 yrs production there flies ahead and china this great place we keep hearing about is suddenly in turmoil after global consumption of it's goods collapses on the back of Hugh austerity in USA and Europe, it's demand for dairy falls, as a result milk price plummets and d poor old farmer co op after spending all their money building the plant selling to Glanbia, they say sorry lads can't sell d milk at price in d plan look at the world market that's the price farmers paid 18cent a liter for milk! HAPPY DAYS !!!

Co op indebted pension timebomb farmers can't pay bills etc etc.

I don't need to listen to dis ****e about more capacity n new guys coming in ( a guy in milk with yrs can't get quota but it's given to a new entrant) the whole thing is total bo***cks . Wit vested interests looking after themselves as usual.

whether you like it or not supplies are going to increase dramatically - might not reach the 50% but they will surely be pretty close

Now i am asking again how are we going to process this?? Because regardless of USA, NZ or China this increase is going to happen in Ireland and in Glanbia

On the debt the JV could be DEBT FREE by 2017 and it could be 100% Coop owned within 6 years. So by 2020 Farmers own 100% of their processing rights debt free and 41% of a very profitable and growing PLC and farmers will receive PLC shares as well

(note i'm not saying that increasing cows is the be all and end all but it is a reality of what is going to happen and i agree re
your new entrants point)

I agree wit you we need processing capacity I'm not Havin a go at you tipp man, what I'm against is the plc trying to get theco op off it's back any which way it can, I'm under no illusions once a plc is created then it's a commercial ball game but it was the co op that created it in the first instance so I believe it may be in the co op better interest to regain control of the plc and hold onto the high margin business rather than loseing it for a low margin business. Re the debt yes it is probably possible to be free of it six yrs but it doesnt always work out as you think. And pensions we ain't getting any straight answers there ??

Do you think the no vote the last time round was correct? And what did u vote?

milkprofit

Tip man
U must be on the board if u believe this

!On the debt the JV could be DEBT FREE by 2017 and it could be 100% Coop owned within 6 years. So by 2020 Farmers own 100% of their processing rights debt free and 41% of a very profitable and growing PLC and farmers will receive PLC shares as well!
Where will jv get the money to buythe plc 40% share of jv
then agri buis
then consumer foods
I n debt for ever this new milk will become RED MILK (in the red ) for ever
We own 54% plc we are in charge tell plc(our board -farmer )members to invest in buisness that return is going to increase by 40% acording to the plc

Tipp Man

milkprofit wrote: »

Tip man
U must be on the board if u believe this

!On the debt the JV could be DEBT FREE by 2017 and it could be 100% Coop owned within 6 years. So by 2020 Farmers own 100% of their processing rights debt free and 41% of a very profitable and growing PLC and farmers will receive PLC shares as well!
Where will jv get the money to buythe plc 40% share of jv
then agri buis
then consumer foods
I n debt for ever this new milk will become RED MILK (in the red ) for ever
We own 54% plc we are in charge tell plc(our board -farmer )members to invest in buisness that return is going to increase by 40% acording to the plc

for complete transparency:

I'm not on the Glanbia board
I have a larger than average Coop shareholding
I have a very small PLC shareholding

Why would we want to buy the agri business or the consumer foods division? As far as i am aware they aren't even on the table

If phase 2 is passed then nearly half of those funds will be used to eliminate the Coop debt

Viewtodiefor

Tipp Man wrote: »

milkprofit wrote: »

Tip man
U must be on the board if u believe this

!On the debt the JV could be DEBT FREE by 2017 and it could be 100% Coop owned within 6 years. So by 2020 Farmers own 100% of their processing rights debt free and 41% of a very profitable and growing PLC and farmers will receive PLC shares as well!
Where will jv get the money to buythe plc 40% share of jv
then agri buis
then consumer foods
I n debt for ever this new milk will become RED MILK (in the red ) for ever
We own 54% plc we are in charge tell plc(our board -farmer )members to invest in buisness that return is going to increase by 40% acording to the plc

for complete transparency:

I'm not on the Glanbia board
I have a larger than average Coop shareholding
I have a very small PLC shareholding

Why would we want to buy the agri business or the consumer foods division? As far as i am aware they aren't even on the table

If phase 2 is passed then nearly half of those funds will be used to eliminate the Coop debt

Did you vote yes r no to last proposal?

filterstring

The only people that will do well out of this are the people with a large amount of co-op shares.,Not the farmer that depends on the price of milk .Its basicly younger farmers against older ones with retirement in mind and they are the ones with the coop shares.

Tipp Man

filterstring wrote: »

The only people that will do well out of this are the people with a large amount of co-op shares.,Not the farmer that depends on the price of milk .Its basicly younger farmers against older ones with retirement in mind and they are the ones with the coop shares.

Why exactly?

The young farmers won't find it much good if they want to produce milk but Glanbia won't take it because they don't have the processing capacity

Tipp Man

Viewtodiefor wrote: »

Did you vote yes r no to last proposal?

I voted with the vast majority - not that it is relevant to this proposal

Viewtodiefor

Tipp Man wrote: »

Viewtodiefor wrote: »

Did you vote yes r no to last proposal?

I voted with the vast majority - not that it is relevant to this proposal

I just can't see this proposal being in the interests of the average farmer/shareholder . That's my view I maybe wrong

It turns out after time the last one was crap too and we were told at the time how good it was. Plus I have no confidence in the board members to look after farmers interests.

freedominacup

Tipp Man wrote: »

So I ask again where is this extra processing capacity going to come from? Who is going to pay for it?

And my answer is glanbia plc. After all we own the thing and have "control" of the board we just need to exert that control. Nobody died and left John Maloney in charge, he needs to be put back in his place. He's the hired help nothing more.

They've decided they want to be in the milk processing business without having to concern themselves with all of the nasty palaver involved in assembling milk, dealing with farmers and primary processing. Well newsflash boys you can't process milk without assembling it first anymore than I can produce milk without the messy business of dealing with all of the expense of keeping the animals over the winter months. It'd be marvelous to just turn up on the 1st of June every year when all of the hard work was done and siphon off the cream but no business works like that.

This plan is intended to put us in hock to the company store permanently or at least until our plc shareholding has been frittered away.

Now I have a couple of questions for you.

First off answer the question about what value you place on a company with an EBITA of €23 million?

Secondly on what do you base your assertion that milk from glanbia is being shipped around the country for processing because of a lack of capacity currently? Milk moves between processors all of the time but I believe that both glanbia and dairygold have enough capacity to process whatever production increases that are likely in the first couple of years after 2015.

Thirdly why does the co-op still have debts of I believe €45 million when it's share of the dividend over the past two years should have been around €45 million and we were told in 2010 that co-op debt stood at €60 million. As far as I am aware the plc has been paying around half of it's profits in dividend over the last 18 months to two years.

Finally why are you so anxious to invest in a business with a return of 3-4% when Maloney says he wants 13% as a minimum? I heard a lot of talk at the Dungarvan meeting about the plc rigour. About how all costs and investments are viewed through the prism of delivering a higher return on investment and literally in the next breath we were being urged to invest in this low margin business because they weren't willing to and this still seems to be the only impetus compelling us to make this investment. The plan as I understand it is we invest in a business with only low margin output which we will be contractually obliged to sell to glanbia plc at a price of their choosing. They can take this output, process it further and literally make off with the cream. Yep it's such a no brainer for us, all upsides, we'd be mad to turn it down.:rolleyes:

hurling_lad

freedominacup wrote: »

And my answer is glanbia plc. After all we own the thing and have "control" of the board we just need to exert that control. Nobody died and left John Maloney in charge, he needs to be put back in his place. He's the hired help nothing more.

If the farmer board members pull rank and direct John Moloney to start ploughing the company's cash into 4% ROI stainless steel and seasonal working capital for processing milk, everyone with PLC shares might as well start using them to light the fire.