A multi-billion dollar international business is thought to be in the running to acquire Irish dairy firm LacPatrick, AgriLand can reveal.

It’s understood that a Japan-based company has made contact with the Irish milk buyer to say it is interested in striking a deal.

The company, AgriLand understands, is called Mitsui and is headquartered in Toyko. It is one of the largest corporations in the world and was founded in 1876.

Mitsui operates across a range of sectors, including chemicals, engineering, banking and food.

The firm currently has dairy operations in Indonesia and also previously partnered with one of New Zealand’s secondary level processors, Synlait.

It’s an area the Japanese firm has been keen to invest in recently. Just last year it acquired a 30% stake in Indonesian milk producer Raffles Pacific Harvest and processor ABC Kogen Dairy. At the time, the firm said it planned to invest $50 million in the sector.

Mitsui already sources dairy products in Ireland for use in the Asian and Japanese markets; so a deal could be likely as bosses are seeking a natural extension of the existing relationship between the two firms.

A spokesman for LacPatrick declined to confirm or deny the presence of Mitsui in the bidding process.

He said: “As we are in locked in a commercially sensitive process, it would be inappropriate for us to comment on any third party.”

Why a Japanese firm?

Japan is the fourth biggest import country in the world for dairy products. The country needs to import almost 40% of its entire milk demand. Japan imports 4.5 million dairy products.

Japanese dairy farmers receive a price equivalent of close to 75c/L for their milk – but, despite high prices, the sector is still struggling to attract younger farmers.

As a result, companies in the country are increasingly finding the need to partner with other firms to secure a supply channel.

How did it start?

The bidding process began following a meeting of the board of LacPatrick Dairies on Tuesday, April 17, when the firm issued a statement in which it said it was “pursuing a number of strategic options”.

The move came following uncertainty after successive milk price cuts over the spring period which left the Monaghan-based co-op behind its near neighbours.

Since then, the likes of Glanbia, Lakeland Dairies, Aurvio and Dale Farm have all publicly, or privately, expressed an interest in partnering with LacPatrick.

At the time of publication, AgriLand was unable to make contact with anyone from Mitsui.