Business

Dairies merger will create €1 billion co-op 'and boost milk price'

Confirming the merger are (from left) Andrew McConkey, chairman LacPatrick Dairies; Michael Hanley, CEO Lakeland Dairies; and Alo Duffy, chairman Lakeland Dairies
Confirming the merger are (from left) Andrew McConkey, chairman LacPatrick Dairies; Michael Hanley, CEO Lakeland Dairies; and Alo Duffy, chairman Lakeland Dairies Confirming the merger are (from left) Andrew McConkey, chairman LacPatrick Dairies; Michael Hanley, CEO Lakeland Dairies; and Alo Duffy, chairman Lakeland Dairies

LAKELAND Dairies and LacPatrick Dairies have reached agreement to merge following the unanimous approval of the boards of both co-operative societies who are recommending the proposed merger to their respective shareholders.

Owned and controlled by farmers, with more than 3,200 milk suppliers and a collective milk pool of some 1.8 billion litres, the new co-op will be the second largest dairy processor on the island of Ireland with a combined annual turnover in excess of €1 billion, creating internationally competitive scale while ensuring efficient costs of operation.

And the move, which has been in the planning since June and which is still subject to regulatory approval, is likely to underpin a sustainable and competitive milk price for thousands of dairy farming families north and south.

Exclusive discussions about the merger reached a positive outcome where the boards of both societies are unanimously recommending shareholders to vote in favour of the merger at special general meetings due to take place in Cookstown on October 23.

Lakeland and LacPatrick are neighbouring societies each operating on a cross border basis exporting the vast majority of their output to global markets.

Each has a heritage of excellence in co-operative dairy farming spanning well over a century and share common business development aims in the interests of their shareholders, milk producers and rural communities.

Both co-operatives are highly successful agri-food industry players with excellent manufacturing facilities and complementary strengths and advantages in their various worldwide markets.

The combined new co-operative says it will work to support dairy farming families on a long term basis into the future by maximising market returns and paying a sustainable and competitive milk price in line with market conditions.

Andrew McConkey, chairman of LacPatrick Dairies, said: “Our board firmly believes that an amalgamation with our neighbours in Lakeland Dairies is the best thing for our milk suppliers, shareholders and customers.

"It gives our farmers the necessary security to make long term business decisions and provides stability for continuing progress in dairy farming for the next generation.

"With an enlarged milk pool and well invested dairy processing sites on both sides of the border, the new co-operative will be a co-op of scale working in the long term best interests of dairy farmers, ensuring global market access and serving our valued customers with an even greater capability and an expanded range of high quality, value-added dairy products.”

Alo Duffy, chairman of Lakeland Dairies said: “This merger proposal is a once in a lifetime opportunity for both co-operatives to continue their strong progress in a very meaningful way.

"Both societies are committed to the long term wellbeing and economic success of dairy farming, milk producers and rural communities. The merger will uphold these values and will lead to further scale, strength and sustainability for milk producers. It will enable us to process all of the milk sent to us, including the expanding output of our dairy farming members.”

Michael Hanley, chief executive of Lakeland Dairies, added: “I'm confident that the best interests of the shareholders and milk producers of both societies will be best served through this merger.”

:: LACPATRICK DAIRIES - It was established in 2015 following the merger of Ballyrashane Co-op and Town of Monaghan Co-op. Ballyrashane Co-op was established in 1896 and Town of Monaghan Co-op was founded in 1901. LacPatrick has 848 milk suppliers and currently processes approximately 600m litres of milk annually. The co-operative’s consumer foods product mix includes liquid milk, butter, yogurt and desserts sold under the well known brands champion, Ballyrashane and private labels. Additional product capability includes bulk butter, textured butter and Regato cheese. LacPatrick also markets milk powder under the LP and Greengate brands. LacPatrick has three main sites at Monaghan, Ballyrashane and Artigarvan.

:: LAKELAND DAIRIES - It was established in 1990 through the merger of Killeshandra Co-operative and Lough Egish Co-operative. Lakeland is a farmer-owned dairy processing co-operative with operations across 15 counties on a cross border basis. Lakeland collects and processes over 1.2 billion litres of locally produced milk from 2,500 milk suppliers each year. Lakeland is an internationally recognised supplier of superb dairy ingredients and foodservice products underpinned by an outstanding mix of high quality raw materials, modern processing facilities and a highly skilled workforce. Lakeland Dairies markets and distributes 240 different dairy products in over 80 countries worldwide. It produces some 200,000 tonnes of butters and powders annually. The co-operative is well invested with modern manufacturing facilities at Bailieboro, Killeshandra, Lough Egish, Newtownards and Banbridge.