Mr. Peter Nallen:

I thank the Chairman, the clerk to the committee and the members for this opportunity. It is a privilege to be here and we look forward to giving the members a history of our current business in Ireland and outlining some of the plans, challenges and opportunities we see for the sector as we go forward.

The company we have established in Athy, County Kildare was founded in 1847. We have a long history of being a very important part of the farming and local community. The business, under its current owners, was acquired in March 2010 from the former Greencore Group. The company set out an ambitious strategy at that time to develop and increase its current production, which was approximately 67,000 tonnes of malt per annum, to bring it up to full capacity, and to do so by securing and winning business which would be servicing the Irish indigenous brewing and distilling industries.

We were looking for a local supply chain capable of producing malt locally and delivering that malt to very well-known Irish brewers and distillers. Currently, the operations part of that business is our plant in Athy, which is producing 98,000 tonnes of malt. This is close to full capacity. That has been achieved over the past seven years by the company investing a lot in the supply chain, in the facilities and equipment in the plant in Athy and by investing in the people and the research and innovation that we brought to the industry.

To give a general overview of our malting barley supply chain, one of the key figures that makes Irish malting barley supply chains stand out over other chains in our business is that it is fully traceable from seed to glass. That is unique and differentiates the Irish supply chain. It gives all our global customers a sense of security in terms of food safety and traceability to know that we can go back and examine specifically the field and tell our customers everything that happened to the crop in that field in a given year. That level of detail clearly needs a lot of data to be captured and that is done through one-to-one contact and one-to-one contracts with each of our 600-plus growers and that is done via our agronomy team. Again, one of the key differentiators that we have over competition here and across Europe is that the seed, which is the critical component in establishing the crop in the first place, is certified to be of a superior quality than anything else on the market. In addition, our fertiliser, which we do not supply but we recommend, and the chemicals which we do supply - all the programmes regarding the husbandry and crop management - are specifically customised to each specific field of each specific grower. We do not apply a carte blanche, one-solution-fits-all approach. It is very much hands-on with a lot of personal contact and time spent with growers to fully understand the challenges they face and trying to make sure that we bring those data together and are able to apply science in the right way to make sure that their crop every year is the best it can possibly be.

Our agriteam is 11 in number and where we are different and where we feel we are better than the other competition we have, either locally or in Europe, is that our team is wholly dedicated to the sustainable growing of malting barley. As they have no other distraction in terms of any other cereal crop, all of that expert knowledge and all of those expert data are being fed back into the business in order that we continue our year-on-year ambition to improve and get better. We are always future-proofing our business, which hopefully means we are future-proofing the economical livelihoods of all of those growers.

This is an important topic and we were very interested in hearing the previous session. We believe that communication is key. Communication comes in many forms and involves many contacts. Axereal is our parent and is a French company, the ownership of which is a co-operative of 13,000 French farmers. They bring a new perspective in terms of investing in agriculture and in our business. They take a much longer timeframe in terms of return on that investment and leaving a legacy for the next generation. Boortmalt itself is currently the fifth largest malting company in the world, headquartered in Antwerp in Belgium. Annually, it produces about 1.1 million tonnes of malt. To move forward and to continue to achieve the success that we have so far in our journey over the past seven years, it would not be possible without ongoing collaboration and co-operation with the IFA.

Before 2010, we had a very different business relationship with the IFA. Post 2010, we have seen new owners bring a new perspective, a new vision and a new openness regarding understanding what farmers need and what farmers will look for in terms of a livelihood and a future in the industry.

We have also developed significant relationships with the Department of Agriculture, Food and the Marine. As for conversations earlier today that referred to the pipeline of new varieties that are put forward every year and their testing from an agronomic point of view, we do further testing in the malting industry on the actual malt quality that can be determined from those varieties. Ultimately, with our consumers, we need to understand the liquid quality or the quality of that particular variety once it is transformed from malt ultimately into beer or indeed whiskey and how does it excite or delight our consumers.

We work very closely with Teagasc and have been building strong relationships with it over the past couple of years. To differentiate from comments in the previous session, Teagasc has run extremely accurate scientific trial centres in various locations where we have tried to be different. We have seen the diversification that happens across the different counties in which we source our barley, which include counties Louth, Meath, Kildare, Offaly, Galway, Carlow, Kilkenny, Wexford and Waterford. Under our own trial programme, we have decided to invest annually about €1 million to make sure we are at the forefront of the industry on the island. We do so by moving and deploying those trial and research areas into those specific rural locations in order that we can actually figure out what does work in each of those specific growing counties. UCD has always been a positive source of assistance. Dr. Tom McCabe has done a lot of work with us in terms of building our own trials, understanding the output of those trials, because the data must be interpreted to make informed decisions and building a path to a better way of producing malting barley in Ireland. In our own field trial programme, somewhere between 1,500 and 1,600 field trials take place right around the country annually. This leads to a huge amount of data coming in and allows us hopefully to make the best decisions in respect of variety selection and in placing varieties in each of those counties to maximise the potential benefits for growers in matching and balancing the impact of quality and yield.

As for our growers, we need each one of them to be able to have a viable sustainable income. We communicate with them throughout the year via leaflets and technical meetings. We do crop walks, they get written prescribed advice per field and we offer them spray programmes. If there is any immediate risk regarding potential crop quality during the growing season they get an immediate SMS or a telephone call. We host on-farm field evenings to try to impart knowledge and expertise. We host and invite growers and arrange for growers to visit all of the trials programmes and the trial plots we set up around the country. It is also important for them to see where the malting barley goes post-harvest when it is dried, stored and recovered from dormancy. We bring them in and show them the malting plant and the standards in food hygiene we require, as well as giving them an understanding of the transformation process that happens in the malting plant. Hopefully, they can then understand the impact of all of the detail we expect them to bring to the growing of malting barley and how that has an impact on that quality.As I said, we work with the IFA and as the Irish Farmers' Journalreaches a lot of people, we try to collaborate with it to cover pertinent topics that are important to driving, building and sustaining the industry.

The malting plant itself in Athy, County Kildare, currently covers about 10 acres. We have a green area members can see in the bottom corner of the accompanying diagram on which we hope to build and I might come to that later. To make sure that everybody in the room understands what we do, we are converting barley into a suitable raw material for the production of beer and whiskey.

The process change that we are able to control and drive within the plant means that we control the germination or growing of the barley under industrial conditions so that the starch in the barley is changed to allow sufficient enzyme activity. This will then deliver fermentable sugars which are used in the production of beer and whiskey.

On the basic process flow, we receive the barley at harvest time and this is dried and stored. The main processing steps are: steeping, whereby we hydrate the barley back up from 14% moisture to approximately 45% - this takes anywhere between 36 and 48 hours; germination, whereby we allow the starch to break down within the barley over a period of four to five days; and kilning, which is the drying process and which involves the use of a lot of energy to remove moisture so that the grain is suitable for long-term storage. Kilning results in the level of moisture being reduced to around 4% or 5%. The malt is then analysed in order that we can determine that it is suitable for customers. It is put in storage and then blended before being delivered to our Irish customers.

What we have come to understand over the past seven years in particular is that customer service is absolutely paramount. Central to that, as members can see in the diagram provided, innovation and research are key. One must understand where one's consumers and customers are going in terms of what they want in the context of product performance, both now and into the future. Customers like and demand that we have full control. In other words, we have to be hands-on regarding every part of the process - from seed through to production of the crop, harvesting, storing, transportation, processing and on to the consumer. One of the key changes that has happened in recent years is that we have feedback loops with all of our key customers and we communicate with them on a weekly basis. We are, therefore, able to tell how the product is performing in their business units within a couple of days. This allows us to adapt, change and flex our process so that we are always fully optimising what is delivered. This allows our Irish customers - a selection of whom we are very proud to supply - to fine-tune their processes, with a huge investment in technology right across the board, even among those producing craft beers, which can be seen from the bottom row of the diagram. The level of detail, sensitivity and attention to the variation they see from one truck to another truck means that it is a very precise process. In turn, the standards we are setting and those the industry needs going back down the line are targeted towards the very precise farming of malting barley.

I will conclude on the issue of sustainability. This is an important part of how we all work. As a business, our vision is to move forward into the future and ensure that our activities are more sustainable and, ultimately, if possible, carbon-neutral. We have invested hugely in the plant in Athy during the past seven years. Our capital expenditure runs to somewhere in the region of €1.52 million per annum in order to ensure that we are at the cutting edge in what we do. We always try, where possible, to minimise our impact on the environment. We were one of the very first members to join Origin Green. We love that initiative. We are in close contact with Bord Bia and we participated in a number of initiatives with it. We reached out to Bord Bia when we decided that we needed to build what is a world first, namely, our own sustainability scheme, which is specifically tailored for the growing of malting barley. At farm level, we have achieved a significant milestone this year. In August, our sustainability scheme - in the context of the way we work with our growers - was, as a result of an audit carried out under the sustainable agriculture initiative, certified as being silver status. This means that we and our growers have made commitments to continually work to improve the social, environmental and economic sustainability of their activities.