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Long-awaited creameries merger creates powerful new force in dairy sector

By Margaret Canning

Published 23/07/2015

A new creamery will lift milk from over 1,000 farmers
A new creamery will lift milk from over 1,000 farmers
Back: Gabriel D'Arcy, chief executive of the new LacPatrick Co-op (left), and Nigel Kemps, deputy chief executive. Front: chairman Hugo Maguire (left) and deputy chairman Roy Irwin

Ballyrashane Creamery and Town of Monaghan creamery have finalised their long-awaited merger, creating Northern Ireland's second biggest dairy co-op.

Shareholders voted in favour of the merger, with the new entity to be called LacPatrick - combining a familiar Irish name with the Latin word for milk.

Co Londonderry-based Ballyrashane is a familiar name in butter in Northern Ireland and lifts milk from 100 farmers around a 15-mile radius from Coleraine. It has turnover of around £80m.

And Town of Monaghan has turnover of around €250m (£175m), lifting milk from 950 farmers, including some in all six counties of Northern Ireland.

It produces milk powder and yoghurt as well as milk and butter, processing its milk in Monaghan and Artigarvan, Co Tyrone.

It has a major contract with Abbott, a US-based maker of infant formula which has a manufacturing plant in Cootehill, Co Cavan.

But Nigel Kemps, the chief executive of Ballyrashane - and deputy chief executive of the new LacPatrick - denied the move amounted to a takeover of Ballyrashane rather than a true merger.

"It is seeing both boards come together in full into one board and the two businesses complement each other in their different sectors," he said. Ballyrashane has a 15% share in LacPatrick, compared to the 85% share of Town of Monaghan.

Mr Kemps said Ballyrashane was bringing significant attributes to the deal. "We recently invested in a £9m butter facility which has been identified as world class, and where we have been able to specialise in texturised butter for the croissant market."

Gabriel D'Arcy, the chief executive of Town of Monaghan and the chief of the new entity, said: "I am delighted with the strong confirmatory vote from both sets of shareholders, and that our companies are coming together to become a powerful new force in the Ulster dairy sector.

"We now have the scale and ambition to win in what is currently a very challenging and competitive marketplace.

"Given the volatility of global dairy markets, this merger further underlines the importance and significance of this ambitious move by our two companies."

Mr Kemps added: Our aim is to give dairy farmers in the north of the island confidence to grow their own businesses and herds."

"LacPatrick as a combined entity can achieve scale and volumes, delivering more than the two separate companies could have done on their own."

The merger comes at a tumultuous period for dairy farmers as they grapple with falling prices and the end of milk quotas, which were abolished by the EU from the beginning of April.

Belfast Telegraph

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