Claire Mc Cormack and Conor Finnerty
Board of LacPatrick Dairies ‘considering a merger’
The board of LacPatrick Dairies is considering a merger to consolidate the dairy industry, it has been confirmed today.
Following a meeting of the board of LacPatrick Dairies last night (Tuesday, April 17), the processor has issued a statement outlining that it is “pursuing a number of strategic options“.
In the statement, the chairman of LacPatrick Dairies, Andrew McConkey, said: “The board of LacPatrick Dairies met on Tuesday, April 17, and it has agreed on pursuing a number of strategic options with a view to identifying the best way forward that is in the interest of its suppliers, shareholders, staff and customers.
This may or may not include partnerships, joint ventures, mergers and other opportunities to consolidate the dairy industry.
“The decision by the board of LacPatrick comes following a number of approaches from international and national companies from the sector in recent months.”
AgriLand understands that the move is not financially driven as the company has stated on numerous occasions that it is on a strong financial footing.
However, as the dairy co-op does not have an external income stream – and having invested €40 million in a state-of-the-art dryer at its Artigarvan facility in Co. Tyrone in 2015 – the company stands by a mantra that “the future is in consolidation”.
It is understood that no discussions have taken place with any potential suitors with regards to a joint venture or merger.
It is believed that the potential impact of Brexit and its proximity to the border has played a significant role in this new development.
Earlier this week, the board of LacPatrick Dairies met to set a price for March milk. The co-operative announced a 2.5c/L cut to the price paid to suppliers in the Republic of Ireland, who will be paid 30.25c/L.
Meanwhile, a price of 25p/L (a drop of 2p/L on the February price) has been set for suppliers in Northern Ireland. The decision comes on the back of continued weakness in the dairy markets, especially for powders, according to LacPatrick.