Northern Ireland agri-food companies join forces to tackle farm crisis
Northern Ireland agri-food business Fane Valley is joining forces with Lakeland Diaries in Cavan for two joint ventures.
The firms are linking up their dairy and agri-business interests in joint ventures as the environment for farmers on both sides of the border continues to worsen.
It's the second tie-in between cross border co-ops in as many weeks after Ballyrashane Co-op, in Co Antrim, and Town of Monaghan Co-op confirmed their long-anticipated merger.
The latest deal is playing up Fane Valley's prowess in agri-business and Lakeland's major dairy operations.
In a joint statement, Fane Valley and Lakeland said their ventures would "enhance economies of scale and overall competitiveness for their farmer members, milk producers and customers".
And a spokesman said a full merger may take place in future.
Trevor Lockhart, chief executive of Fane Valley, which has its main operations in Banbridge and Armagh, said: "This far-sighted agreement represents the strong commitment of Fane Valley and Lakeland Dairies to support our members, milk producers and customers through the development of an even more competitive market position on a joint venture basis.
"The combined strength and backing of both co-operatives will ensure success for our agribusiness and dairy operations and will underpin the future success of our business."
Fane Valley has interests ranging from dairy to red meat, agricultural supplies and renewable energy. It employs around 2,100 people and had recent pre-tax profits of £8.7m. Its meat portfolio includes Linden Foods and Kettyle Irish Foods.
Lakeland processes milk from 15 counties, north and south, and recently finished work on an £8m global logistics centre at a dairy food service processing site in Newtownards. The co-ops are merging and pooling their feed manufacturing, sales and stores activities into an agribusiness company to be managed by Fane Valley, with Lakeland as a partner and shareholder.
A spokesman for the businesses said the joint venture was projected to have annual revenues of £125m. The second joint venture involves a merger and pooling of the duo's dairy processing activities and operations, to be managed by Lakeland Dairies with Fane Valley as partner and shareholder. The projected annual revenues of the dairy entity will be around £480m.
Michael Hanley, chief executive of Lakeland Dairies, said: "The establishment of these strategic joint ventures will create further value and benefits for the producers and customers of both co-operatives. This development underpins our mutually shared ambition to provide the highest possible milk prices to producers.
"Through this combination, we are adopting an innovative and strategic approach to maximising our efficiencies and overall strength in addressing the growing worldwide market demand for dairy products and food ingredients."