Lakeland Dairies is now Ireland’s third biggest dairy processor, having acquired Fane Valley’s dairy business for an undisclosed sum.
Lakeland will now be able to process up to 1.1bn litres of milk annually, third only to Glanbia’s annual two billion litres and the 1.157bn litres Dairygold processed in 2015.
In August of 2015, the Co Cavan-based co-op unveiled plans to enter a series of strategic joint ventures with Fane Valley, based in Banbridge, Co Down, which would have involved the dairy and agri-business interests of the respective businesses.
Instead, a more simplified acquisition was agreed. Lakelands chief executive, Michael Hanley, said: “The agreement 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.
“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.”
Fane Valley is the latest in a series of developments at Lakeland, which last year acquired Taste Trends, the UK-based maker of Coolicious branded frozen yogurts.
The co-op also opened a new global logistics centre at its dairy foodservice manufacturing site in Newtownards, Co Down, and upgraded its other dairy processing sites, including, Killeshandra, Co Cavan.
Lakeland manufactures 107,000 tonnes of milk powders a year.
This will rise to 150,000 tonnes on the commissioning this year of a new milk dryer at Bailieboro, where it also manufactures 31,000 tonnes of butter annually.
Fane Valley chief executive, Trevor Lockhart, said: “Fane Valley has opted not to take up a shareholding in Lakeland Dairies Co-operative Society as was intended in the original joint venture proposal.
“In the end, it was evident some of the complexities involved in establishing and operating a cross-border joint venture of this nature were going to detract from the key strategic purpose of the merger and the ability to fully realise all commercial synergies,” he said,
Lakeland Dairies markets 230 dairy foodservice and food ingredient products to 77 countries, exporting close to 100% of its entire production capacity globally.
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