Farm Ireland
Independent.ie

Saturday 24 June 2017

Suppliers offer €9m for Wexford Creamery stake

Declan O'Brien

Declan O'Brien

Milk suppliers to Wexford Creamery have made a €9m pitch for a controlling stake in the business.

Wexford Milk Producers (WMP), a co-operative of 350 dairy farmers who supply the creamery, has announced that it is in advanced discussions with Dairy Crest to purchase 50pc of the shares in Wexford Creamery Limited.

If successful, the bid will result in WMP becoming the majority shareholder. It would increase WMP's shareholding from 20pc to 70pc, with Dairy Crest's shareholding falling from 80pc to 30pc.

Negotiations between the parties are expected to be finalised by the end of March but any deal will be subject to approval by WMP's members.

A statement from WMP said the proposed increase in the farmers' shareholding would give milk suppliers a greater input into the processing business and allow Dairy Crest to concentrate on their key brands.

It is proposed that Dairy Crest will continue to provide a range of services to Wexford, including packing and distribution. Dairy Crest will also sell Wexford-branded cheese in Britain on behalf of the creamery.

Wexford Creamery produces a range of quality cheeses for the Irish and British markets, as well supplying milk and fresh cream products across the south east. For the year ended March 31, the company's turnover was €56m.

Borrowing

WMP chairman Michael Vaughan confirmed that the €9m purchase will be financed through borrowing. He said sourcing the funding would not pose any difficulty for the co-op.

"This is a tremendous opportunity for WMP to determine our own future. We are pleased that Dairy Crest will retain a stake in the creamery and will assist in the development of the business," Mr Vaughan said.

He pointed out that Wexford Creamery is a profitable operation and WMP's aim would be to increase output by using spare capacity at the cheese plant. This cheese would be targeted at the British export market.

Dairy Crest's executive managing director, Martyn Wilks, said the company will continue to work with WMP for the benefit of Wexford Creamery.

A cheese processing plant was established in Wexford in 1959, with WMP contracted to supply the milk. A majority stake was bought by British firm Unigate in 1963.

WMP bought a 20pc share in the business from Waterford Foods in 1986, while Dairy Crest came on board in 2000 when they merged with Unigate.

In other news, the board of Lakeland Dairies has held its December milk price at 25.5c/l (VAT inclusive) for manufacturing milk.

In light of the recent severe weather conditions, Lakeland Dairies also added a hardship payment of 0.5c/l. This brought the December milk price to 26c/l.

Town of Monaghan Co-op has confirmed that it is holding on 25.5c/l (VAT inclusive) for December supplies.

Irish Independent