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€300 million investment in dairy processing announced by Minister Coughlan

The Minister for Agriculture and Food, Mary Coughlan T.D., today announced a dairy processing sector investment package amounting to some €300 million over the next three years. The investment will include some €100 million of Government grant assistance and is designed to act as a catalyst to her vision for the future of the dairy industry in Ireland.

Announcing the package, Minister Coughlan said: "I fundamentally believe that this investment package is capable of taking the Irish dairy sector forward in a cohesive and strategic manner and will lead to the sustained development of the sector into the future as envisaged under the AgriVision 2015 Action Plan."

The package will enable the State, through Enterprise Ireland, to provide financial assistance in support of capital investment into the marketing and processing of dairy products falling within the scope of Annex 1 of the EU Treaty. In total it will trigger some ?300 million in gross capital investment. Support will be geared toward the individual needs of each investment and will be available toward the cost of construction and acquisition of buildings, new machinery and equipment, and associated costs.

"The amount of state support is very considerable, some €100 million, but I firmly believe that such a level of state support is not only desirable from an industry perspective, but is absolutely essential if the growth potential of the sector is to be delivered. Such a significant investment is also, I believe, evidence of our confidence in Government about the future of dairy farming and the dairy industry in Ireland. We have seen enormous change and progress across the agri-food sector. It has been achieved through the hard work and enterprise of farmers and all of those involved. In Government we have strived to lead that progress and assist stakeholders by adopting pragmatic, but ambitious, policies and I believe that my announcement today is yet another solid example."

Minister Coughlan had previously identified the critical need to engage with the processing sector on the achievement of the optimum configuration in terms of scale and capacity utilisation and efficiency within the sector.

"This much needed injection of capital, with direct support from the Government, will reinvigorate the sector and will go a long way toward realising my commitment to the development of a modern, competitive, innovative market focussed and highly efficient food sector in Ireland."

The Minister said that there has been a hugely positive response from the sector to this initiative from the contacts that have already been made between her Department, the Co-ops and the Irish Dairy Board, and between Enterprise Ireland and the processing companies. She expressed her confidence that Co-ops will approach investment decisions in an extremely positive light as a result of this initiative. Equally farmers should greatly welcome the increased investment in dairy processing with its objective of increasing efficiency and enabling milk producers to secure a fair return.

"With continued vision and leadership, the Irish dairy and wider food sector has the potential to become the brand and origin of choice with today's quality conscious consumer across the globe. My announcement today is another investment in that ultimate goal and I have every confidence that together, all of us fighting for a sustainable and successful future for Irish agriculture, will realise that vision."

Enterprise Ireland is to manage the scheme and evaluate the suitability of investment projects submitted for grant assistance. Minister Coughlan will announce full details of the scheme shortly, following state aid clearance from the European Commission.

28 July, 2006

Date Released: 28 July 2006