Lakeland Dairies now third largest Irish processor with one billion litres of milk
The northwest-based Lakeland Dairies Co-op will become the third largest processor in the country after a deal was struck to purchase Northern Ireland's Fane Valley's milk business.
Following lengthy talks over the Bank Holiday weekend agreement was reached for an undisclosed sum between the Co Cavan head-quartered firm and the business in Banbridge, Co Down. The move will bring an additional 250 million litres to Lakeland's pool of 900 million litres of milk collected across 15 counties on a cross-border basis.
The additonal capacity will make it the third largest processor in the country after Glanbia and Dairygold.
Both businesses had unveiled plans last year to create joint ventures across both the dairy and agri-business operations.
However, it emerged yesterday that they had opted for a "simplified" purchase deal involving the milk processor.
In a year where struggling dairy farmers have seen base milk prices plummet to 22 cent per litre, Michael Hanley, chief executive of Lakeland, said it was a major step forward for the co-op and it would bring efficiency.
With farmers' cash flow under major stress, Irish Farmers' Association (IFA) dairy chairman Sean O'Leary urged all dairy co-ops "not to shy away from hard decisions on further co-operation and consolidation" to drive cost savings and support farmers.
Fane Valley Co-op's Trevor Lockhart said they opted against the original plan due to the complexities of the cross-border joint venture.