Lakeland Dairies and Fane Valley in joint ventures worth €845m
Fane Valley and Lakeland Dairies have announced they will create two major new Joint Venture businesses which, they say, will enhance economies of scale and overall competitiveness for their farmer members, milk producers and customers at home and abroad.
Following the approval of the Boards of each society, two specific Joint Venture companies will be established covering two lines of business (dairy and agribusiness) which will benefit from merged resources.
The Agribusiness Joint Venture
The first Joint Venture is being established by a merger and pooling of both of the societies’ feed manufacturing, sales and stores activities into a major agribusiness company to be managed by Fane Valley.
Lakeland Dairies will be a partner and shareholder in the Agribusiness Joint Venture and will also be represented on the board of the new company.
Fane Valley and Lakeland Dairies currently have an annual animal feed manufacturing capacity of 310,000t and 190,000t respectively, with a broad range of high performance feed products sold north and south.
The merger of both agribusiness operations will create a business with greater efficiencies, larger scale, buying power and the capability for future growth and service delivery across a larger geographic area, they say.
The projected annual revenues of the Agribusiness Joint Venture will be in the order of €175m.
The Dairy Joint Venture
The second Joint Venture is being established by a merger and pooling of both of the societies’ dairy processing activities and operations, to be managed by Lakeland Dairies.
Fane Valley will be a partner and shareholder in the Dairy Joint Venture.
In Northern Ireland, Fane Valley and Lakeland Dairies currently procure 250m litres and 330m litres of milk respectively each year for processing into a wide range of value added dairy products and food ingredients, all of which are exported worldwide.
The purpose of the Dairy Joint Venture is to create a business of greater scale and efficiency with the capability to grow and to compete even more intensively on a global basis.
Combined with the total existing Lakeland Dairies milk pool, the Dairy Joint Venture will process over 1 billion litres of milk annually.
The projected annual revenues of the Dairy Joint Venture will be in the order of €670m, they say.
Fane Valley milk suppliers will receive the same benefits and provisions as Lakeland Dairies milk suppliers and Fane Valley will have direct representation on the Board of Lakeland Dairies.
Both co-operative societies will otherwise continue to operate on an independent basis and each will support the other in the operation of the Joint Ventures.
Michael Hanley, Chief Executive, 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.”