Glanbia’s supplier fund wins innovation award
European agri co-ops representative body Cogeca has presented its 2017 Business Model Innovation Award to Glanbia for introducing the Glanbia MilkFlex Fund.
The fund offers Glanbia’s milk suppliers in the Republic of Ireland competitive loans to invest in on-farm productive assets, including livestock, milking platform infrastructure and land improvement. The innovative fund’s repayments vary with seasonality and movements in milk price.
Henry Corbally, Glanbia chair, said: “We are delighted to receive this award and with the overall positive response to the Glanbia MilkFlex Fund since it was launched. The purpose of the fund is to provide our milk suppliers with innovative funding that helps protect farm incomes from the impact of dairy market volatility. Since its launch in March 2016, the fund has encouraged renewed debate on the development of innovative funding products for farmers which is positive for the overall sector and to be welcomed.”
Since its arrival on the market in May 2016, the fund has received more than €90m in loan applications. The average value of MilkFlex loans drawn from the fund is €100,000 to date.
A key feature of this loan product is that it has inbuilt ‘flex triggers’ that adjust the repayment terms in line with movements in Glanbia Ireland’s manufacturing milk price and seasonality, thereby providing farmers with cash flow relief when most needed.
Rabobank, the Ireland Strategic Investment Fund, Finance Ireland and Glanbia Co-Op Society are co-investors in the fund; Finance Ireland originates the loans and manages all aspects of the fund.
The interest rate charged on the loans is a variable rate of 3.75% above the monthly Euribor.
