Dairy processing and agribusiness co-operatives - Fane Valley and Lakeland Dairies – are planning to create two new joint venture businesses, it has been announced.
Following the approval of the Boards of each society, the first joint venture will see both of the societies’ feed manufacturing, sales and stores activities merge into a major agribusiness company to be managed by Fane Valley.
Lakeland Dairies will be a partner and shareholder in this Agribusiness Joint Venture and will also be represented on the board of the new company.
The projected annual revenues of this Agribusiness Joint Venture will be around €175m.
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.
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”.
It will process over one billion litres of milk annually, with projected annual revenues of the Dairy Joint Venture will be in the order of €670m.
Trevor Lockhart, chief executive of Fane Valley said: "This far sighted agreement represents the strong commitment of Fane Valley and Lakeland Dairies to support our members, milk producers and customers through the development of an even more competitive market position on a joint venture basis.
"The combined strength and backing of both co-operatives will ensure success for our agribusiness and dairy operations and will underpin the future success of our business."
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."