Business Irish

Sunday 19 May 2019

Northern Ireland's Dale Farm eyes LacPatrick

Former LacPatrick chief executive Gabriel D’Arcy
Former LacPatrick chief executive Gabriel D’Arcy

Donal O'Donovan and Louise Hogan

Northern Ireland's Dale Farm says it's interested in rival LacPatrick, which revealed on Wednesday that it was examining "strategic options" understood to include a merger or sale of the business.

Monaghan-based LacPatrick collects milk from farmers on both sides of the Border, and is understood to have received approaches from two Irish dairy co-ops and an international operator.

At the same time, LacPatrick has been under pressure to lift the price it pays for milk to retain suppliers in a tough market.

It was formed nearly three years ago following a merger of Ballyrashane Creameries in Coleraine and Town of Monaghan.

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

It is understood that Cavan-based Lakeland Dairies has made an approach to LacPatrick. Last night, Dale Farm, the largest dairy co-op in Northern Ireland, said it also has an interest in the situation.

"As the largest farmer-owned dairy cooperative in Northern Ireland, and indeed the UK, Dale Farm has been made aware of the situation at LacPatrick and we have an interest in these developments," the co-op said in a statement.

Belfast-headquartered Dale Farm is owned by a cooperative of 1,300 dairy farmers and employs more than 1,000 people.

On Wednesday night, a spokesman for Lakeland Dairies said it had "noted" LacPatrick's announcement. "LacPatrick is a substantial business with a strong heritage in co-operative dairy farming," Lakeland said.

LacPatrick's cross-border operations mean Brexit is a significant issue for the business. However, last year it unveiled a new €42m 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.

LacPatrick informed its dairy farm suppliers by text message that it's considering its future - which could mean it enters into "a merger, partnership or joint venture" following an unscheduled board meeting on Tuesday night where senior figures in the co-op assembled to consider the co-op's future.

It is understood a domestic deal, to merge with a rival with a more diversified income base, is the most likely outcome if there is a deal.

In a recent interview with the Irish Independent, LacPatrick chief executive Gabriel D'Arcy (pictured) said the UK would remain a core market after Brexit, but that the business was looking at alternative markets

"We will be focused on driving product development, building relationships with processors seeking access to our technology and expanding our customer base in Asia and the Middle East," he said.

Irish Independent

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