Dairygold and Arrabawn remain coy over possible merger
A spokesman for Dairygold would not confirm or deny reports that it had approached Arrabawn.
He said the society had been engaged in active dialogue with milk processing neighbours over the past three years.
This was in the pursuit of opportunities to optimise dairy processing and maximise the milk price and it would continue to do so, he said.
Arrabawn said that it is in regular contact with other processors and that “the door is always open should they wish to take it further with us”.
Earlier this year, there were reports that some Arrabawn suppliers, said to be unhappy with the price they were being paid for their milk, wanted to transfer to another processor.
That in turn fuelled speculation of possible merger talks with Dairygold as the overall dairy industry braced itself for looming challenges.
These challenges include global market volatility, milk price pressures, and the new environment created by the abolition in 2015 of European Union quotas.
However, in a weekend statement to the Irish Examiner, Arrabawn chief executive Conor Ryan said the co-op has received no request from any suppliers to move elsewhere.
“We are in continuous dialogue with them and we are always available to any individual or group who wish to meet with us to discuss the situation,” said Mr Ryan.
“We are paying a competitive milk price, as is evident from recent milk leagues, and we are optimistic that a number of projects currently in hand will lead to further improvement.
“We are determined to retain all our milk suppliers and we welcome new entrants to milk from within our catchment area.
“We have a structure in place that enables all our suppliers to expand to whatever level of production they are capable of with a minimum investment in shareholding, which was announced almost two years ago and is in operation for over a year.”
Nenagh and Mid West Creameries merged in 2001 to form Arrabawn Co-op, which has 980 milk suppliers, 300 staff, and operations in six counties, across three provinces, stretching from the borders of Limerick City to Co Roscommon.
Sales growth in the society’s dairy and agri trading divisions, especially in the second half of the year, boosted 2013 turnover at Arrabawn to a record €220m with an operating profit of €2.8m.
Dairygold is Ireland’s largest farmer-owned dairy business and the country’s second largest milk processor. It has 3,000 suppliers across Munster and employs over 1,100 people.
It recorded increased turnover of €847m and a record operating profit of €27.3m on its core activities for 2013.
