Lakeland Dairies’ acquisition of Fane Valley’s dairy business makes it Ireland’s third-largest milk processor. The County Cavan based farmer-owned dairy processing co-operative has certainly come a long way since its genesis 120 years ago.
In May, 2016, Lakeland Dairies in Cavan acquired the Fane Valley Dairies business based at Banbridge, County Down, with a joint-statement issued by the two co-ops announcing: “This simplified deal structure is considered to be a better option than the originally proposed strategic joint ventures, announced previously in August 2015, which would have involved both the dairy and agri-business interests of the respective businesses.”
The original plan involved two joint ventures. The first of these was to be a merger and pooling of the societies’ feed manufacturing sales and stores activities into an agribusiness company (to be managed by Fane Valley); the second would have constituted a merger and pooling of the co-ops’ dairy processing activities and operations into a new company (managed by Lakeland).
But the proposed joint venture model, which had been assessed for almost eight months, was abandoned due to the complexities of establishing such a cross-border initiative. Referring to the acquisition of Fane Valley Dairies for an undisclosed fee, Lakeland’s chief executive Michael Hanley said: “The strategic rationale behind Lakeland Dairies and Fane Valley co-operating to advance the interests of their respective businesses is as strong today as it was in August 2015. It is extremely positive that the Boards of both co-operatives have had the foresight to recognise the limitations of the initially proposed Joint Venture arrangements and the courage to adapt and revise their approach.
“The current market environment is undoubtedly challenging both for producers and processors. However, we have a strong ambition, in Lakeland, to further strengthen our position in global markets as a leading provider of high quality foodservice products and dairy food ingredients.
“The agreement we have reached with our neighbouring co-operative, Fane Valley, represents a major step forward for the industry and for Lakeland Dairies, albeit not via the structure initially envisaged. The move will reinforce our continuing commitment to pay the highest possible milk price to all our milk producers through continuing innovation, efficiency and excellence in everything we do. We look forward to working with our colleagues in Fane Valley to progress the mutual success of our milk suppliers in the years ahead.”
Lakeland Dairies boasts a proud heritage of success spanning 120 years. The modern-day Lakeland Dairies Group was formed in 1990 through the merger of Killeshandra and Lough Egish Co-operatives, established in 1896 and 1902 respectively. Since then, through a process of organic and acquisitive growth, the dynamic co-operative has evolved into one of Ireland’s top dairy processors.
The acquisition of Fane Valley’s Northern Ireland-based dairy business brings approximately 250 million litres of milk to Lakeland, adding to its existing 900 million litre pool. Collecting some 1.1 billion litres either side of the border, Lakeland is now the third largest milk processor in the country, only marginally smaller than Glanbia and Dairygold.
Lakeland Dairies Group, which also manufactures more than 90,000 tonnes of milk powder a year – a figure expected to rise to 130,000 tonnes following the completion this year of a new €36 million, seven-tonne-per-hour dryer at its Bailieborough facility – is one of Ireland’s largest farmer-owned dairy processing co-operatives, with fresh milk collected daily from over 2,200 family farms, operating in a fifteen-county catchment area across the northern half of the island of Ireland.
From high quality and contented dairy herds, living on lush green pastures, Lakeland Dairies creates a comprehensive portfolio of 170 different dairy foodservice and food ingredient products which are exported to customers in over 70 countries worldwide.
Committed to the provision of wholesome dairy products using naturally produced milk that is collected from farms under the strictest conditions of quality and traceability, Lakeland Dairies will continue to be a high performance, operationally efficient, customer focussed and market leading dairy processing co-operative, paying as competitive a milk price as possible and contributing to the future sustainability of dairy farming for the long term.
As well as catering directly for domestic consumption, Lakeland Dairies exports large volumes of dairy produce to the UK, Europe, North and South America, Asia, Africa and other international markets. The Group is also a leading provider of dairy produce to Ireland’s Kerrygold brand.
Their Agri-business Division is a producer focused business supporting thousands of farming producers with scientifically-based nutritional information and high performance products, backed by a top-quality customer relations service, fast and efficient deliveries and a network of regionally based retail outlets.
All of Lakeland Dairies’ processing facilities are operated to the most stringent international standards of quality and sustainability. To ensure customer satisfaction, they rigorously test all raw materials, in-line processes and finished products.
The vision of Lakeland Dairies is to achieve long term success and prosperity for dairy producers throughout the northern half of the island, which they will achieve continuously by identifying and meeting the needs of customers – competitively and cost efficiently – with wholesome, natural produce of the highest attainable quality.
The success of Lakeland Dairies down through the decades is a direct result of their willingness to move with the times. Their acquisition of Fane Valley Dairies is a bold case in point.
Lakeland Dairies
Group Head Office
Killeshandra
Co. Cavan
H12 V273
Tel: +353 (0) 49 4364200
Email: [email protected]
www.lakeland.ie
Taken from Irish Tractor & Agri magazine Vol 4 No 6, July/August 2016
