Cormac Tagging doubles revenue after securing State contract
Farms are valuable assets, and like any business, maximising the value from that asset makes good commercial sense. Just like humans with individualised passports, farm animals can be uniquely identified through a numbered tag that is pierced into their ears.
The purpose of the tagging is for traceability on the one hand, so that all meat can be tracked from farm to fork. That unique number stays with the animal all through its life and beyond, as it makes its way through the food chain.
This is very comforting for consumers, particularly in the light of some scandals in recent years.
The current national cattle herd is 6.5 million and with 2.8 million calves born every year, it's a tidy niche industry.
TJ Gormley was a sheep farmer in Tuam, Co Galway, with an added passion for innovation in farm equipment and accessories.
He has won many agri innovation awards over the years, some of these products included weighing scales, foot baths and other livestock handling equipment.
All these concepts needed to be showcased and sold, so he set up a farm supply retail store in Tuam. From 2001, the company added sheep, goat and pig tagging to the portfolio and now holds 33pc of that market in Ireland.
The supply of cattle tags however is awarded by the Department of Agriculture, Food and the Marine and it was only possible to access the market through a tender process, which came up every two years.
The company engaged in every tender without success. For 14 years, the tender was won by just one Irish company which meant that during this time, farmers did not have choice of supplier or product. And in a market-driven economy, that scenario wasn't to last.
Business: Cormac Tagging
- Set up: 2005
- Founder: Thomas and Cathleen Gormley
- Turnover: €2m
- No of Employees: 22
- Location: Tuam, Co Galway
The Business Model
Ursula Kelly is the eldest daughter of five girls and she joined her father TJ in the business in 2014.
An accountant, she went through various business development programmes, such as the 'Enterprise Ireland Going for Growth' and 'AIB Women in Business Growth Academy'.
"This gave me the added confidence and drive to just go for it and to take the business to the next level," she said.
In December 2016, the company was awarded a contract to supply cattle tags. Cormac Tagging is the sole importer and distributor of Caisley tags in Ireland, a German-designed tagging system.
As it claims it is such a superior quality cattle-tagging product that the company guarantees replacement tags for free, for the full life of the animal. Because farm animals get up to all sorts of mischief, such as rolling around the ground and getting their heads stuck in wire, the tags take lots of abuse.
However, the Caisley cattle tag's replacement rate is less than 1pc proven across 17 countries in Europe.
Lightweight and flexible in design, and with live patents on the products, the tagging system is far superior on the world animal-traceability stage. This has to be a big attraction for farmers, as they currently replace over half a million tags annually. It's not just that farmers save on the replacement cost, but also the potential penalties if there are animals without tags during inspections by the department.
The tags are laser printed with a 15-digit number that is allocated by the department.
If you've ever seen a human's ears being pierced, you'll be familiar with this system.
The tag is attached to the ear using a punch-type applicator. However, it also takes a tissue sample from the ear at the same time, which is then sent off for testing, as part of the BVD disease eradication programme.
BVD virus is the cause of an important viral disease of cattle that is estimated to cost Irish farmers around €102m each year, according to Animal Health Ireland.
The business is very heavily weighted from November to January.
Due to our weather and grass growth, Irish farmers plan their calving season for the start of the year. Roughly 70pc of the country's new-born calves arrive in an eight-week period from about now. Given that calves must be tagged within 28 days of birth, that puts pressure on the production process for the company.
Selling is done directly to farmers through online ordering and the telephone, and the company has more than doubled its turnover in tags in the last year.
It is a very price-sensitive market with low margins, so costs have to be managed tightly.
In an emerging Ag Tech sector, the company will continue to innovate and add to the portfolio of products.
Ursula has ambitions to be the number one animal identification supplier in Ireland and knows that it will take work and dedication.
They are more than prepared for the effort having spent the last 30 years in the agri industry.
Sunday Indo Business
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