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Agri firm's appetite for global growth

Richard Kennedy is driving innovation and growth at feed and food giant Devenish Nutrition


Richard Kennedy, group CEO of Devenish Nutrition, with some of the company’s herd. Photo: David Conachy

Richard Kennedy, group CEO of Devenish Nutrition, with some of the company’s herd. Photo: David Conachy

Richard Kennedy, group CEO of Devenish Nutrition, with some of the company’s herd. Photo: David Conachy

During the July drought, an archaeological dig of the parched garden beside Dowth Hall, an 18th-century mansion in the Boyne Valley, revealed a 5,500-year-old passage tomb likely built by Ireland's earliest farmers.

The tomb, described as the most significant megalithic find in Ireland in the last 50 years, was unearthed on an estate owned by Owen Brennan, the executive chairman of agri-technology company Devenish Nutrition.

He bought Dowth Hall and its 430-acre estate at auction in 2013 for a reported €5m and has already turned some of its land into a Devenish research farm.

Richard Kennedy, Devenish's chief executive, says the company set up the farm at Bru na Boinne for the same reason Ireland's first farmers did - because of its fertile soil and location beside the River Boyne.

However, the Belfast-based company, which has long operated on both sides of the Border, has bigger plans in mind for Dowth: it will be home to its Global Innovation Centre.

That's been made possible by a long-term funding deal worth €118m that Devenish secured earlier this month. The refinancing of the private company's capital base comprises €40m from the European Investment Bank (EIB) - the largest-ever EIB funding for an Irish agri-business - and commitments from the company's new commercial finance partners, Ulster Bank and Danske Bank.

The financing will enable Devenish to accelerate its revenue growth over the next three years through R&D, mergers and acquisitions, and new manufacturing sites as it strives to become the world's leading provider of integrated animal, human and environmental health products and solutions.

By 2021 Devenish aims to boost its turnover by more than £100m (€111.3m) to £315m and add some 100 jobs to its current 450-strong international workforce.

The deal is part of a strategic plan put in place at the low-profile farming and food company five years ago to structure its expansion, Kennedy says. It came about after the EIB saw Brennan give a presentation about Devenish at a Dublin conference two years ago.

The €40m in quasi-equity from the EIB will enable Devenish to commercialise its innovations. The company makes pre-mixed and speciality feed for pigs, poultry, cattle, sheep, horses and dogs, among other animals.

But it has increasingly been using technology to improve the use of nutrients throughout the entire food chain to capitalise on consumer appetite for healthy and sustainable food, through its R&D and innovation programme, dubbed One Health: From Soil to Society.

This programme will be based at the new Global Innovation Centre, which will house its group R&D board and 30 staff.

Kennedy says Devenish has research work "going on in a variety of locations throughout the US, Africa, Asia and Middle East. This new hub will bring all of this together, analyse it, provide direction and initiatives to engage with those local markets and ensure the research is commercially applicable in those regions".

However, the financing from the European Union's long-term lending institution was nearly scuppered by Brexit.

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"It faltered and stuttered around Brexit, because of the EIB being a European bank and because of the uncertainty around Brexit," Kennedy says. The deal "took a bit longer than expected. That was to ensure we were able to mitigate all the risks and to have a strategy in place to deal with any eventualities around a hard Brexit and a soft Brexit.

"The patient equity the EIB put in will go across the UK and Ireland. We are not going to allow Brexit take those opportunities away."

Devenish generated about half its sales outside the region last year.

As it continues to diversify, it will deploy the new funding to pursue additional markets both within and outside the EU and strengthen existing ones.

In 2017, it bought a 50pc stake in a Yem-Vit, a Turkish maker of poultry, ruminant and aquaculture products.

Devenish is now in talks to buy as many as seven companies in Europe, Africa, Asia, the US, the UK and Central America.

Kennedy says: "They are small acquisitions - bolt-ons that will give us the opportunity to expand into those markets and partner with people who have experience in that market."

Devenish's international reach is a far cry from its humble origins. It was set up as a trading-based feed company in 1952 and now has 10 manufacturing sites across Ireland, the UK, the US, Turkey and Uganda, offices in the UAE, Uganda, Mexico, the Philippines, the Dominican Republic and India, and exports to 40 countries around the world.

Kennedy himself grew up in a family that owned a livestock mart, where he helped out from the age of seven.

"The livestock mart provided me with a love for the business of agriculture," says 53-year-old Kennedy.

After graduating in 1989 with a degree in agricultural science from UCD, Kennedy went into the animal nutrition industry. After working with Brennan in a Tallaght-based company throughout the 1990s, the pair decided it was time to have their own business. So when Brennan led a management buyout of Devenish in 1997, Kennedy joined the company, later taking a stake.

"Devenish has flowed in my veins over the last 20 years and it's as much a part of me as I am part of it," he says.

Back in 1997, Devenish was a feed company with just 23 employees and a £5m turnover - 90pc of which was generated in Northern Ireland.

"Now we have 23 different nationalities working for us and a presence in 30 countries," Kennedy says.

Sales have grown every year since then and are poised to hit £250m in 2018, says Kennedy.

"We've been profitable every year but we do reinvest all our profits in our business to grow it and ensure we continue to be innovative," he says.

"We knew if needed to grow even more exponentially, we would need a different method to fund it and that's why the financing deal was so important."

One of Devenish's biggest breakthroughs was the world's first omega-3 enriched chicken. It spent a decade researching and developing it with poultry producer Moy Park. By 2016, high-end British supermarket chain Waitrose was selling chicken fed with Devenish product OmegaPro, an algae-based source of omega-3 polyunsaturated fatty acids, and reared on Moy Park farms in Northern Ireland. Devenish is also one of the industry participants in VistaMilk, a new Science Foundation Ireland agri-technology research centre run by Teagasc. It will use data analytics on milk production to develop precision technology that can enable the expanding Irish dairy sector become more efficient.

Kennedy says: "It has the potential to help farmers develop an even higher quality product and to access and utilise nutrients in milk that have the potential to improve human health."

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