LACPATRICK: THE NEW ULSTER DAIRY BRAND

Gabriel D’Arcy, Chief Executive of newly formed LacPatrick Co-op and Aidan McCabe, Dairy Adviser, with the new Lacpatrick logo  Photo:  © Michael Fisher

Gabriel D’Arcy, Chief Executive of newly formed LacPatrick Co-op and Aidan McCabe, Dairy Adviser, with the new Lacpatrick logo Photo: © Michael Fisher

END OF AN ERA FOR TOWN OF MONAGHAN CO-OP AS MERGER APPROVED WITH BALLYRASHANE

Lacpatrick: Dairy by Ireland Since 1896 is the new brand

Michael Fisher  Northern Standard  Thursday 23rd July p.2

Town of Monaghan Co-Op is to enter a new era in September following the virtually unanimous approval on Tuesday of its merger with the Ballyrashane Co-Op in North Antrim. The new company to be known as LacPatrick is said to be a platform for growth, against a backdrop of a challenging global market. It is described by the two Chief Executives as a ‘game-changing’ merger, which includes plans for further significant new investment later this year at Artigarvan near Strabane as a critical part of the new Co-op’s growth strategy.

New logo and brand name for the two merged co-ops in Monaghan and Ballyrashane

New logo and brand name for the two merged co-ops in Monaghan and Ballyrashane

The name LacPatrick reflects the size and scale of the new operation and its strong global ambitions to grow the business in Ireland and beyond. The new entity will be led by a new Board of Directors comprising the former two Boards, with a new management team headed up by Gabriel D’Arcy and Nigel Kemps – former CEOs of Town of Monaghan Co-op and Ballyrashane Co-op respectively.  Mr D’Arcy will be the new Chief Executive, with Mr Kemps appointed as Deputy Chief Executive. Monaghan will continue to be a headquarters for the new entity and it will also be the site for research and development. Tuesday’s meeting in Monaghan was attended by around 200 shareholders/suppliers and 93% of them voted in favour, slightly more than had endorsed the plan at the first special meeting at the start of this month. In Ballyrashane the vote was 100% in favour.

Standing are Gabriel D’Arcy (Chief Executive of newly formed LacPatrick Co-op) and Nigel Kemps (Deputy Chief Executive LacPatrick Co-op), with (seated) Hugo Maguire (Chairman, LacPatrick Co-op) and Roy Irwin Deputy Chairman. Photo: © Brian Thompson Photography

Standing are Gabriel D’Arcy (Chief Executive of newly formed LacPatrick Co-op) and Nigel Kemps (Deputy Chief Executive LacPatrick Co-op), with (seated) Hugo Maguire (Chairman, LacPatrick Co-op) and Roy Irwin Deputy Chairman. Photo: © Brian Thompson Photography

Gabriel D’Arcy told the Northern Standard he was delighted with the strong confirmatory vote from both sets of shareholders, and the decision for the two companies to come together to become a powerful new force in the Ulster dairy sector.  “We now have the scale and ambition to win in what is currently a very challenging and competitive marketplace.  Given the volatility of global dairy markets, this merger further underlines the importance and significance of this ambitious move by our two companies”, he said.

“Our shared geography and production facilities, technologies and customer listings, together with the combined balance sheet strength, offers a unique opportunity to create a true leader in the Ulster dairy food sector, focused on innovation and competitiveness.  This potential for clear and endurable market leadership will ensure that the new merged entity will continue to make competitive and sustainable returns to our members, the dairy farmers of Ulster.  This merger is a platform for future growth for all associated with LacPatrick and, we look forward to making further announcements in the weeks and months ahead regarding future investment.”

Nigel Kemps of Ballyrashane said: “This merger is particularly necessary when we look at the state of the market and especially the poor returns paid to producers. The size and scale that we now have as a merged entity will ensure we can be more competitive, and achieve better returns. Our aim is to give dairy farmers in the north of the island confidence to grow their own businesses and herds.  LacPatrick as a combined entity can achieve scale and volumes, delivering more than the two separate companies could have done on their own.”

The name LacPatrick has been chosen to reflect the core ethos of the newly merged Co-op, which is to bring its innovative and excellent dairy products to consumers at home and internationally. Lac is a Latin word for milk, and Patrick is synonymous with the island of Ireland. The two combine to create a name which underpins the newly birthed Co-op’s rich heritage, but also speaks of its ambitions to grow and develop.

The added strap-line ‘DAIRY BY IRELAND Since 1896’ is a clear statement of its longevity in its markets and communities and defines the solidity of the new entity. The new logo features a modern red map pin to celebrate LacPatrick’s location in the rich and fertile northern part of the island.  A four- leafed clover emphasises its good fortune in being situated in an area of such natural bounty and the milk drop symbolises the central focus of the business.  The green colour is reflective of the nutritious grass of Ulster’s pastures and the natural goodness of the island of Ireland.

The new name will be used at trade fairs and to market the new company on the global milk market.  It will also appear on tankers in conjunction with the individual consumer brands of the two former Co-ops.  Existing product brands such as Champion milk and Ballyrashane Butter will remain. LacPatrick will officially commence trading on September 1st 2015.

Town of Monaghan Co-op employs 150 people and is a farmer owned co-operative with a turnover of approximately €250m.  It has approximately 950 farmers supplying 460 million litres annually.  The milk is processed at Coolshannagh, Monaghan and at TMC Dairies (NI) Ltd in Artigarvan, Co. Tyrone.  Yogurt, liquid milk, cream, butter, bulk skim milk and bulk evaporated skim milk are produced at its Monaghan headquarters with spray dried, whole milk and skim milk dairy powders being produced at Artigarvan.

Ballyrashane Co-op’s main site is located close to the world famous Giant’s Causeway on the North Antrim Coast.  Renowned for its innovation, the company has in recent years expanded to its current position as a leading dairy supplier within the global market, boasting a wide portfolio of products and employing approximately 150 staff. Ballyrashane remains true to its roots as an independent co-operative still owned by local farmers and contributes financially, socially and environmentally to the local rural community. It has an annual turnover of approximately £80m and buys 100m litres of milk from around 100 local farmers.

Gabriel D’Arcy told me he had been truly humbled with the turnout and engagement at the recent shareholders’ meetings regarding the merger. The strong endorsement of our plans reflected the common sense approach of the Monaghan shareholders and  the shared vision and ambition of our community, he said. The current weakness and difficulties in the dairy sector underlined the importance and necessity of this plan and already it was being put forward as a shining light for the sector in Ireland and the need to consolidate for the benefit of suppliers and customers alike.

Asked about the new name, brand and image for the new entity, he said it had been an energising exercise to find something that reflected the shared heritage, the fertile region, the skilled and committed suppliers and the global vision of the co-op, with the vast majority of output destined for outside the European Union. “We want to tell the world what we do and what makes us special and distinctive, and firmly establish ourselves on the global dairy market in terms of quality and innovation. We want to highlight our region while maintaining a quintessentially Irish image, with its strong positive dairy connotation”, Mr D’Arcy said.

Out of these many desires emerged the name LacPatrick.

  • Lac meaning Milk
  • Patrick , with its strong Irish association
  • Dairy by Ireland – where else !
  • Since 1896 – our heritage

This new imagery will be used on all of milk tankers, uniforms, stationery, website and all outdoor and indoor signage. The existing and award winning brands, Ballyrashane, Champion and LP will be retained, while providing a common and exciting platform for growth, at home and abroad.

Mr D’Arcy believes both businesses complement each other. He said Ballyrashane had a specialised fractionated butter business while Town of Monaghan was committed to new processing technologies, which will allow them to add value to the non-butter components of milk. With this in mind a commitment has already been made to invest between €25m and €30m at the Artigarvan plant in Tyrone.

“Both businesses also have a robust brand profile in the marketplace. Ballyrashane has strong liquid milk, butter and cheese lines. The Champion liquid milk and yoghurt brand is synonymous with Town of Monaghan while our Leckpatrick milk powders are amongst the most sought after on the African market”, he said.

“It has been my experience that only those businesses with a strong balance sheet will survive the ups and downs of a volatile marketplace. And this is exactly what the new business brings to the table. The ability to simply generate profits is not enough when it comes to long term, commercial survival,” Mr D’Arcy said.

The merger has been welcomed by the Irish Farmers Association. IFA President Eddie Downey, who said it would help to improve the efficiency and sustainability of the dairy sector in the North of the island. “I have no doubt this will benefit dairy farmers on both sides of the border, by strengthening milk processing in the Northern region, by taking out cost and duplication, and by allowing for synergies, he said. Mr Downey said he hoped it would encourage the rest of the industry to examine the efficiency of its structures carefully, as producer milk prices had now reached unsustainable levels, and co-ops needed to arrest the slide.

The Town of Monaghan Agricultural and Co-Operative Dairy Society Ltd opened on May 15th 1901. Ballyrashane had been going for five years at that stage. The Northern Standard of Saturday May 18th 1901 reported how the new Monaghan Co-Operative Creamery had opened on Wednesday last and was devoted altogether to the reception of whole milk which was dispatched to Belfast. There was a great deal of interest excited in the town in connection with the opening, and large numbers visited it during the week, some people being rather astonished that so much machinery was required in connection with the management of milk, which heretofore had seemed so simple in the farm houses…It is to be trusted that the society…will be successful in its efforts to revive this decaying industry in our county. If anything should induce the farmers to support the creameries throughout the county it is the wretched price paid for butter and eggs in Monaghan market last week.

The article is carried in the history of the creamery produced in 2001 to celebrate its centenary by the late John O’Donnell, its former Manager. He took up the position in 1947 and during the course of a long and challenging career, he initiated a number of new departures, including the development of pasteurised milk sales at retail and wholesale level. He became the leader in milk distribution over long distances outside of Dublin. In the book he recalled how the amalgamation of the Clones and Monaghan Societies in 1963 consolidated the future of the new Society, with odern butter-making facilities and packaging lines for home and export.

He pioneered the experiment with plastic sachet milk in Ireland, followed by the elimination of glass milk bottles and the introduction in 1969 of the pint tetrahedron container, later to become a litre size. By the mid-1980s a link was established with Melkunie in the Netherlands to produce under licence their range of “Mona” yogurts and desserts for the Irish market in a new factory at Coolshannagh which opened in 1984. Boxer Barry McGuigan became the successful face of “Champion” milk.

Under the stewardship of Vincent Gilhawley since 1988, Town of Monaghan expanded into Northern Ireland purchasing Strathroy from the Cunningham family and then Leckpatrick from the Kerry Group in 2002, paving the way for this merger with Ballyrashane.

ULSTER CO-OPS VOTE TO MERGE

Town of Monaghan Co-op CEO Gabriel D'Arcy at Coolshannagh  Photo:  © Michael Fisher

Town of Monaghan Co-op CEO Gabriel D’Arcy at Coolshannagh Photo: © Michael Fisher

TOWN OF MONAGHAN CO-OP SHAREHOLDERS ENDORSE PROPOSED MERGER WITH BALLYRASHANE 

The proposed merger of Town of Monaghan Co-Op and Ballyrashane Co-Op in North Antrim has been strongly endorsed by shareholders of both Societies. There will now be a three weeks cooling-off period before the plans are put before the members again for formal approval. Both chief executives said afterwards there had been very good turnouts at the two shareholder meetings on Tuesday night in Monaghan and Ballyrashane. They said it was clear there was a resounding acceptance of the strategic fit between the two co-ops and that a merger would enable them to do things together that they could not do alone.

This development is one of the most important chapters in the history of the Co-Op since its foundation as the Town of Monaghan Co-operative and Dairy Society Ltd in 1901. Around 350 people packed into the Four Seasons Hotel in Monaghan on Tuesday. Of these, 263 were shareholders eligible to vote on the resolutions at the Special General Meeting.

At the start, the Chief Executive Officer Gabriel D’Arcy, who was appointed to the post last year, outlined his and the Board’s vision for the Co-op as it trades in an international market and following the abolition of EU milk quotas in April. He spoke about the crucial contribution that a merger with Ballyrashane would make in achieving that vision. Mr D’Arcy also outlined the benefits accruing to all suppliers both in the Republic and in the North as a result of the merger.

The meeting lasted three and a half hours during which there was an open and informative question and answer session with shareholders. When the first resolution, the proposed merger, was put to the meeting, it received overwhelming endorsement by 88% of those eligible to vote. A threshold of 75% was required for approval. At the meeting of Ballyrashane shareholders at the co-op’s premises, there was an even stronger endorsement of 97%.

Further meetings will take place at both locations on July 21st when a minimum of 50% approval will be required before a legal agreement can be drawn up between the two Societies. The merged entity will have a new name, but this has not yet been revealed. It would be a name that resonates with international customers and reflected the wholeness and Irishness of the dairy product. If approved, it would come into operation on September 1st. Based on current figures it would have a combined annual turnover of  €320 million (€200m TMC and €120m Balyrashane). It would become the second biggest dairy processor in the province of Ulster.

The amalgamation would see TMC making up 85% of the new co-op and the other 15% Ballyrashane. The headquarters would be in Monaghan. Members of the Board of both co-ops (16 in TMC and 10 in Ballyrashane) would hold their current positions until elections would be held for a new Board in eighteen months’ time. Hugo Maguire from Clones will be the new Chairman and Roy Irwin (Ballyrashane) the Deputy Chairman.

Gabriel D’Arcy who would be the new CEO and his Ballyrashane counterpart Nigel Kemps who would be Deputy CEO of the proposed new co-op said the discussions had been a very positive process. They had moved through the various stages in line with the expectations and guidelines agreed initially by both parties. Both sides said they were delighted with the degree of co-operation and good faith that had been exhibited since the possibility of a merger was announced a few months ago. Mr D’Arcy and Mr Kemps said they were convinced that a merged co-op had huge global potential and would be good for the supply base, the staff and the dairy industry in general. Both co-ops have discovered that they have a similar ethos and culture and common values and this has enabled them to build trust during the discussions.

At the meeting of shareholders, the TMC suppliers were told that one of the main benefits of a merger would be the ability of the new co-op to pay a stronger milk price than would otherwise be the case. It would help to secure the existing quality milk pool and grow it to between 600-700 million litres annually (currently around 430 million litres). Ballyrashane sources its milk from 108 farms within a fifteen-mile radius of its plant, which is close to the Giant’s Causeway. Town of Monaghan’s range of great tasting products include whole milk and skim milk powders, which are primarily for the export market as well as fresh milk, buttermilk, butter, yogurts and desserts all of which are marketed in Ireland under the “Champion” brand.

Ballyrashane Co-Op is the oldest dairy in Northern Ireland and produces milk, butter and a specialist cheese for the Greek market. It has blue-chip customers, such as Marks & Spencer. Its butter plant is described as one of the most modern in the country. Town of Monaghan’s range of great tasting products include whole milk and skim milk powders, which are primarily for the export market as well as fresh milk, buttermilk, butter, yogurts and desserts all of which are marketed in Ireland under the “Champion” brand.

Both co-ops employ around 150 people. Both have reiterated their view that a new merged entity would create a powerful new market force. They say their complementary geography and production facilities, technologies, and customer listings, together with the combined balance sheet strength offer the unique opportunity to create a true leader in the competitive Ulster dairy food sector, focused on innovation and competitiveness. An agreement would allow the new co-op to invest confidently up to €35 million in the TMC site at Artigarvan near Strabane in County Tyrone, introducing new processing technology to make value-added dairy ingredients such as butterfats and lactose free products for the international market.

Gabriel D’Arcy told the ‘Northern Standard’ he was very pleased and humbled by the support the merger proposal had received. The Chief Executive remained hopeful the plan would be progressed in conjunction with Ballyrashane in the months ahead. He believed the farmers who attended the Monaghan shareholder meeting were very astute and realised that times were changing. They wanted to take control of their destiny and to put their Society at the forefront of the agricultural industry. It was a big, brave move, he said.