Lakeland Dairies merger: ‘A monumental day for dairy farmers’
Yesterday’s landslide shareholder support for the merging of Lakeland Dairies and LacPatrick Dairies has been described as a “tremendous outcome” for dairy farmers in the northern half of the island of Ireland.
Speaking to AgriLand after the Lakeland shareholder vote at a special general meeting (SGM) in Cavan yesterday (October 23), Michael Hanley, the CEO of Lakeland Dairies, and Alo Duffy, the chairman of Lakeland Dairies, expressed his delight at the strong turnout and the company’s ambitious plans for its suppliers.
“We have had a brilliant result here and a powerful turnout with almost 1,000 people at the vote and 97.7% of them voting in favour of this merger, so it was a great result.
“This means dairy farmers who are supplying the new merger will have a good secure future,” said Duffy.
Lakeland will be a significantly bigger co-op with greater scale and be better able to compete on world markets.
Shareholders at LacPatrick Dairies also voted in favour of the merger in Cookstown, Co. Tyrone yesterday, with the motion strongly backed by 95.99%.
Owned and controlled by farmers, the extensive new co-op – which will be the second-largest in the country next only to Glanbia – will consist of over 3,200 milk suppliers and a collective milk pool of some 1.8 billion litres.
Duffy explained that the merger suited both entities as they both collect milk in the same areas.
However, he also acknowledged immediate challenges the new venture must face.
We must make this new merger more profitable and return a competitive, sustainable milk price to our suppliers.
“We had a Lakeland lorry and a LacPatrick lorry going up the same road. The merger will allow for greater efficiencies among its dairy farmers.”
Michael Hanley, the CEO of Lakeland Dairies, also expressed his views to AgriLand on the result of the vote.
“It is a monumental day for dairy farmers and shareholders of the two fantastic co-ops. It provides a new opportunity now for newly-merged business with 1.8 billion litres of milk, and a number of routes to market in 80 countries all over the world.
It is a great opportunity for an efficient customer lead business to develop and grow and bring good, competitive milk prices to our suppliers.
Hanley pointed out that the merger will give shareholders the benefit of greater scale efficiency and a cost-efficient merged operation that is going to be competitive in any market.
“It will be a sustainable operation that will be there for the long haul,” he said.
‘Brexit safety net’
Addressing the issues surrounding Brexit, Hanley said: “Our business is in reasonable shape from a Brexit point of view and the merger will now provide an increased safety net in relation to whatever comes out of Brexit.
“We now have added facilities in both jurisdictions – north and south – and what we will be doing is maximising the throughput of products for whatever particular market suits and we have processing operations in both areas which gives us tremendous flexibility.”
We will be out to maximise the equation for our suppliers with these facilities.
Hanley also outlined some of the challenges facing the new merger.
“We must combine the businesses and make them efficient and we must put products down the channels that are returning the most profit for farmers.”
The figures are there to say the LacPatrick business needs to improve efficiency and profitability.
He believes that these challenges can be overcome.
“What we have to do now is run the combined entity as an efficient unit and make sure the merged unit delivers for farmers.
“This day should have been here a number of years ago, but we are where we are. The merger has been voted through very strongly by the shareholders.
“It’s a great day for everyone involved in the dairy industry in the northern half of the country,” Hanley concluded.