Thursday 30 October 2014

New chip factory to curb annual flood of 120,000t of frozen imports

Published 11/06/2014 | 02:30

The Future: Patrick Meade with the company's latest innovation- frozen chips made with just two ingrediants - Roosters and sunflower oil

One of the most shocking statistics about Irish food is the fact that we import 120,000t of potatoes annually.

The vast majority of that comes in the form of frozen products, such as chips, from global giants such as McCains, who source their raw material in Britain and Canada. Philip Meade reckons this imported product is worth about €120m a year to the suppliers, and he wants a piece of it.

The shell of a €13m frozen chip factory is already in place at his Lobinstown site and product has begun to flow into Tesco and Dunnes Stores.

With Bord Bia research claiming Irish consumers are 70pc more likely to buy a product if it's produced in Ireland, you might ask why nobody else has tried producing chips in a country so synonymous with the humble spud.

"Maybe we're mad sinking so much money into something when so many others were reluctant to do so," sighs Meade over a coffee in Meade Potato Co's brand new boardroom office.

He says this in the knowledge that the last two chip-making plants in Ireland folded in the last decade. But Meade has reason to believe that the fundamentals have shifted significantly.

"The price of potatoes has equalised a lot across Europe since then. The prices in Ireland have come back a bit, while the prices on the Continent have actually increased. So the raw ingredients for an Irish chip aren't really out of line with what they can do it for elsewhere anymore," Meade claims.

His traders also discovered many of the surplus Irish potatoes they were shipping to Russia and elsewhere over recent years went into chip factories.

But perhaps the key advantage that Meade's plant will have over the previous failed ventures is that the company will be able to keep a strict handle on the quality of potatoes that are used in the process.

Donegal Foods, which shut its doors in 2003, was owned by a co-op of 57 potato farmers. While that should be a strength, it turned into a weakness because some farmers tended to offload unsuitable produce into the outlet.

The Meades are no strangers to sharp dealings with farmers, having succeeded in buying product as keenly as possible, while at the same time satisfying the supermarkets' ever watchful quality controllers.

"But I really do think that Ireland should have a chip factory," said Meade. "It will provide a valuable outlet for potatoes that don't have the perfect skin finishes demanded by the retailer. You need outlets for every category of product from the process."

Meade also knows the fresh potato market is predicted to fall by up to 40pc in value over this decade. In contrast, the frozen chip category is expected to grow by 12pc in value over the next five years.

There is also scope for growth in other frozen potato products, such as waffles.

"And we'd be keeping an eye on the export potential, especially to the Irish diaspora in Britain and the US," said Meade.

Whether the predictions materialise or not, the firm has already contracted 3,500t from local growers at €150/t.

It won't make any of them rich, but it will certainly beat the €75/t some were forced to accept for potatoes last spring when a surplus collapsed prices.

And with the capacity for the plant set at 60,000t of fresh spuds a year, the sky's the limit for the business, and hopefully the sector, behind it.

Indo Farming

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