Farm Ireland
Independent.ie

Tuesday 18 December 2018

Dairy farmers in dark over future as board weighs up merger

Gabriel D’Arcy of LacPatrick Dairies. Picture: Paul McErlane
Gabriel D’Arcy of LacPatrick Dairies. Picture: Paul McErlane

Margaret Canning

Hundreds of dairy farmers are facing potential upheaval after LacPatrick announced it was looking at a tie-in with another business

The Monaghan-based co-op, which collects milk from farmers in border areas in Northern Ireland and the Republic, is thought to have received offers from two Irish dairy firms and an international operator.

It collects milk from around 700 Northern Ireland dairy farmers, and was formed nearly three years ago following a merger between Ballyrashane Creameries in Coleraine and Town of Monaghan, which had already bought over Leckpatrick in Co Tyrone.

Co-op members will have the ultimate say on any changes, and any merger would need backing from 75% of members.

Last year it unveiled a new £30m plant at Artigarvan near Strabane, which it said would "Brexit-proof" the business by enabling it to process milk on both sides of the border.

The Belfast Telegraph understands that Cavan-based Lakeland Dairies has made an approach to LacPatrick.

Last night, a spokesman for Lakeland Dairies said it had "noted" LacPatrick's announcement.

He added: "LacPatrick is a substantial business with a strong heritage in co-operative dairy farming."

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Northern Ireland's biggest dairy firm, Dale Farm, was not available to comment.

LacPatrick informed its farmers by text yesterday morning that it was considering its future, which could mean entering into "a merger, partnership or joint venture".

The announcement from LacPatrick followed an unscheduled board meeting on Tuesday, where senior figures in the co-op assembled to consider its future.

LacPatrick Dairies chairman Andrew McConkey said: "The board of LacPatrick Dairies met on Tuesday, and have agreed on pursing a number of strategic options with a view to identifying the best way forward that is in the interest of suppliers, shareholders, staff and customers.

"This may or may not include partnerships, joint ventures, mergers as well as other opportunities to consolidate the dairy industry.

"The decision by the board of LacPatrick comes following a number of approaches from international and national companies from the sector in recent months."

Dairy farmers enjoyed an uplift in prices for milk during 2017, but in a newsletter to its farmers this month, LacPatrick said it was reducing the price it pays. In the newsletter, Mr McConkey remarked: "We must make sure that the co-op is sustainable and that we are in a strong position not only now but also into the future.

"There is too much milk being produced on the global market at present."

In an in-depth interview earlier this year, LacPatrick chief executive Gabriel D'Arcy talked about the opportunities for market growth for the business.

"We have outstanding opportunities coming in front of us, not to mention further developing our existing markets in west Africa and the Middle East," Mr D'Arcy said.


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