MOST of its competitors may have stock exchange listings but one of the country's largest food producers, Connacht Gold, looks set to continue on its own path, which has seen it develop interests in sectors as diverse as radio and timber.

While rival firms such as Kerry and Glanbia eye up markets in America and Asia, Connacht Gold's chief executive, Aaron Forde, presides over an operation which is mainly based in the north-west of this country.

Despite this, Forde denies that his company is merely a regional business, pointing out that the firm now generates sales of over €300m a year.

"I suppose from a shareholding point of view, we've definitely got a north-west base but in our timber business, for instance, we export 25% of its output. So we've an international reach," he said.

Most of this global presence, however, is provided by the company's dairy ingredients operation, which includes a 40% stake in British ingredients supplier Kent Foods.

Kent, which counts Northern Foods and Greencore among its customers, now accounts for around 10% of Connacht Gold's pre-tax profits and Forde said the business was continuing to perform strongly despite rising raw material costs and deteriorating economic conditions.

"Margins have remained pretty steady throughout the year. The time lag in recovering margins from the kind of customers they have isn't that great so they've been successful in holding on to them. They are a one-stop shop for a lot of things so their scale is helping them," he said.

Another investment that has been doing surprisingly well in the current environment is Mid West Radio, the Mayo-based broadcaster which is 16% owned by Connacht Gold.

Forde said the station seemed to have escaped the advertising slowdown, partly fuelled by the downturn in the housing market, which has hit other media outlets over the past six months.

"It seems to be tough for local newspapers from an advertising point of view but our advertising revenues have been holding up very well so far. I don't know how those guys are doing it. Maybe they are printing money out the back of the station."

Forde is less jovial when discussing Connacht Gold's timber business, which has become a major supplier to construction and freight in recent years. The company owns one of the country's largest sawmills, which Forde admits leaves its timber operations exposed to the downturn.

"The construction downturn has had an impact but our business remains profitable. It's running harder to stay still this year. It's minding its costs and maintaining volumes with its customers," he said.

"But there is a general downturn in all sectors. In the pallet market, we are exposed to everything from pallets for insulation to pallets for washing powder. Everywhere is feeling the downturn. As I said, it takes an awful lot more work to keep your share of the customers."

The company's milk processing arm is also experiencing difficulties as global dairy prices continue to fall from the record peaks achieved last year following a drought in Australia. Like all milk processors, Connacht Gold is now struggling to adapt to more normal prices and falling demand.

"The boom of 2007 was caused by a supply-demand imbalance, which has reversed in 2008 due to weak consumer sentiment and people trading down and shopping in Lidl and Aldi for staples such as milk and butter," he said.

Forde said premium brands such as Kerrygold, the Irish Dairy Board's international butter brand, were struggling to maintain their volumes under current circumstances.

Most of Connacht Gold's butter is sold under the Kerrygold brand, which is up to 30c more expensive than its competitors in some key European markets.

Forde said it was unclear whether the brand could continue to trade at its current premium price and that the board might have to look at promotional pricing to shore up sales. He said, however, that he suspected that the board, of which he is a director, would do whatever was necessary to maintain sales.

"The main thing, given the ownership and heritage of the dairy board, is that they protect the volumes out there and get a lot more tactical about how they support the brand. Whether, in the time we are in, this sustains large advertising spend is questionable, compared with more promotional activity."

Forde believes the difficulties facing the Irish dairy industry could lead to another wave of consolidation among milk processors. He refused to be drawn on whether this could lead to the sale of Connacht Gold's own dairy arm.

"I suppose if you look at us on an international basis, there is scope for more consolidation. The business is very energy-intensive which is very expensive. It is very capital-intensive and capital is in scarce supply," he said. "This means growing a business is difficult, and given the mix of products we have and the milk supply we have, the model that has got us this far probably won't see us through the next 20 or 30 years."

Asked about Connacht Gold's future capital requirements, Forde indicated that it was unlikely that its 14,100 shareholders, most of whom are farmers, would be willing to pump money into the business. He said, however, that the company could sell some of its holdings, which include stakes in Aryzta, One51 and FBD, to finance future growth, due to the increasing cost of capital.

"The return from them is small and their value is volatile. That would be the reason behind turning them, over time, into more active investments that we can manage and have control of and get a better return from," he said. "We'll either turn them into cash to fund growth in one of our core businesses or a new business that we want to be active in. That said, their values are such that you wouldn't want to convert them at the moment."

Curriculum Vitae

Aaron Forde

Age: 56

Education: BSc in Food Business from UCC

Career: 2004-present, chief executive, Connacht Gold; 2001-2004: director of Thomas McDonogh & Sons; 1993 -2001, managing director, Adams Food Ingredients

Interests: Soccer and classic cars