Wednesday 21 November 2018

Ornua hires consultants to integrate acquisitions

Threat: Ornua CEO John Jordan may have to square up to biggest shareholder
Threat: Ornua CEO John Jordan may have to square up to biggest shareholder
John Mulligan

John Mulligan

Ornua has hired a consultancy firm whose co-founder was an executive at Kerry Group and Coca-Cola in an effort to standardise its business model following a number of acquisitions, the Irish Independent has learned.

Ornua, headed by new CEO John Jordan, which has annual revenue of €2.2bn and owns the Kerrygold brand, has hired small Dublin firm Pebble Business Transformation to assist with integrating previous acquisitions.

Pebble's co-managing partner is Joe Hughes. He was the director of global supply chain processes at Kerry, and also the senior director of global supply chain transformation at drug company Mylan.

The other co-founder is Conor Duggan.

He was previously a global process integration architect at Kerry Group.

"In late 2016, we launched Ornua 2021, our group five-year plan, and as part of this plan, it was evident that we needed to focus on integration of these businesses to help standardise our operating model," said an Ornua spokeswoman.

"We have engaged with Pebble to support us in this process and this project relates solely to standardisation."

Ornua, formerly the Irish Dairy Board, said that its engagement with Pebble is not a result of the challenge it's facing from its own biggest shareholder - Glanbia Ireland.

The other major shareholder in Ornua is the Dairygold co-op.

Glanbia Ireland, the unit spun out last year from Glanbia PLC, which owns brands such as Avonmore and Kilmeaden, has just recently launched a new consumer brand in the United States, Truly Grass Fed, focusing initially on the sale of cheese.

Glanbia PLC owns about 40pc of Glanbia Ireland, with Glanbia Co-op owning the remainder.

That brand could put pressure on Ornua, especially if Glanbia Ireland launches a competing butter in the US, or decides to take on the German market, where Kerrygold is the biggest-selling butter.

Kerrygold is the biggest selling imported butter in the US and the second-biggest butter brand overall, despite its premium pricing.

The Irish Independent has also learned that a key executive who worked for Ornua in the United States has left to join Glanbia Ireland's operation there.

Ornua confirmed the departure.

Ornua said that any product that competes on price in the US would undercut Kerrygold's premium position and "will inevitably erode value for Irish dairy farmers".

Irish Independent

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