A new dairy farming project in Co Tipperary is centred on 1,200 cows and 1,000 acres of leased land.
The project has been developed under the aegis of the Employment and Investment Initiative (EII) scheme, according to Elliott Griffin, EII investment manager with Dublin-based Business Venture Partners (BVP) and he stresses that it is not just a vehicle to allow investors avoid tax.
“The founders, Paul Bowes and John Walshe of Tipperary Milk Farm, intend building a sustainable dairy farming business,” he said.
“The new trading business is fully EII compliant. It is leasing the required land from four landowners in the Fethard area of Co Tipperary.
“Paul Bowes and John Walshe are two of the landowners and have significant experience of farming and renewable energy project development.”
Griffin confirmed that BVP is supporting the EII fund raising efforts by the company and in addition some progress has already been made attracting international investors to the project.
“We see one of the key enablers of this project as the incentive provided by the Budget changes introduced last year.
“These allow farmers to earn tax-exempt rental income for leasing their land for 15 years or more. The Tipperary Company is leasing the land for a 20 year period.
“When fully operational, we estimate that the business has the potential to generate annual profits of up to €1m, assuming an average milk price of 36c/L over the investment period,” he said.
Griffin regards the recent fixed price dairy contract announcement from Glanbia as a positive development for the Irish dairy industry as a whole.
Progress to date
According to Griffen, plans are well advanced, to the extent that the land is secured and the initial herd identified.
“It will take between 18 to 24 months to advance the project through the various stages to reach its full working potential.
“The existing farm buildings and infrastructure are currently being renovated. The initial tranche of 200 animals will arrive early next year with the first milk produced during the second half of 2016.”
Griffin confirmed that the total investment required to bring the Tipperary project to its full potential will be €6.5m and we anticipate that this will be funded over time through a mix of EII investment, international investment and corporate investment.
Approximately €0.5m has already been invested by the current team who are shareholders in the company.
“We are on the look out for investors in relation to the new dairy project,” he said.