Huge rise in pre-tax profits at Fane Valley a boost for agri-food sector
THE group which owns some of Northern Ireland's best known food brands has seen pre-tax profits rise by 50% to £8.7m in the past year, in another ringing endorsement for the agri-food industry.
Armagh-based Fane Valley Co-operative – which owns Fane Valley Dairies, Linden Foods, Kettyle Irish Foods, White's Speedicook, Tandragee and has a share in Slaney Foods in the Republic – has also reported a 17% rise in turnover to £534m to the year ending September 2013. However, Fane's boss has warned of a very significant change in the market dynamics for beef following the 'horsegate' saga, which are only beginning to be felt now.
Fane Valley, which was formed in 1903, is owned by 1,800 farmers and employs over 2,000 people at sites in Northern Ireland, the Republic, England and Belgium.
Investment projects were successfully completed within Linden Foods Burradon, Fane Valley Dairies and Fane Valley Stores, reflected by a 15% increase in the net assets of the company.
The group also plans substantial new investment at Fane Valley Dairies in Banbridge. Sales within the Linden Food Group, including the Slaney Foods joint venture, grew by 19% during the year to reach £337m.
Group chief executive, Trevor Lockhart, said that despite 2013 beginning with one of the most difficult winter and spring periods in recent memory, it concluded with improved grazing and crop growing seasons.
"Farmers faced enormous challenges in managing land and livestock through to turnout, which in turn impacted on productivity levels and business cash flows," he said.
"Consumer confidence in beef has been rocked with the effect not being limited to the UK and Ireland.
"These events have led us into a whole new world with regard to customer specifications, production and processing standards, and the associated controls and traceability. The full impact of post 'horsegate' changes within supply chains, a reduced consumer demand for beef across Europe and a lack of retailer promotional activity have resulted in a very substantial overhang of forequarter meat in the market.
"This has triggered a reduction in beef prices which is placing enormous pressure on producer and processor margins."