Dairygold seek €500,000 advice
Dairygold Co-op is looking to the future after spending €488,000 on strategic reports to develop the society, access the Chinese market and potentially takeover neighbouring processors.
The Farming Independent has seen audit reports that show the country’s largest farmer-owned dairy business approved a payment of €430,000 to Deloitte last year for advice on developing the co-op’s future strategy to 2020.
However, it may set tongues wagging in counties Cork and Tipperary as the audit committee also agreed a payment of a further €15,000 to Deloitte for ‘Project NCB’ to provide support and advice in relation to the potential amalgamation or takeover of neighbouring processors.
The last time speculation mounted over a potential merger was in 2014 with Tipperary-based Arrabawn, yet it never amounted to anything. In addition, it spent a further €43,000 on ‘Project Emperor’ to execute a strategy for infant milk formula into the Chinese market.
Dairygold, which spent over €20m subsidising the milk price, saw profits fall 34pc to €19.2m in its recent 2015 results due to the global downturn in dairy commodities. It has confirmed the pay of Dairygold CEO Jim Woulfe and the board will be cut by 10pc, with nine senior managers receiving €2.6m including pension and bonuses last year.
Dairygold refused to comment on the reports it described as “commercially sensitive” but pointed out they were a “normal and necessary part of business planning” and were essential to developing its future strategy.
Fianna Fáil TD Jackie Cahill said it was hard for farmers to see this money being paid when they were getting low milk prices. However he pointed out Dairygold was competing with large plcs such as Kerry and Glanbia and accessing “outside expertise” was the norm.