Fast growth for Northern Irish dairy and meat processor
Fane Valley Co-operative, the leading Northern Irish dairy and meat processor, saw turnover grow by 17 per cent and pre-tax profits by 50 per cent last year.
The group, based at Armagh, achieved a rise in sales to £534 million and profits to almost £9 million for the year ended 30thSeptember 2013. Fane Valley has extensive meat processing operations in Northern Ireland, Linden Foods, and Slaney Foods in the Republic and dairy export business in Banbridge, county Down.
The group, which also owns Kettyle Irish Foods in Fermanagh, a specialist in dry-aged beef as well as lamb, bacon and chicken, is a major supplier of meat to retailers and foodservice organisations in the IK, Ireland and other parts of Europe including Germany and the Netherlands as well as the Middle East.
Group Chief Executive Trevor Lockhart described the performance as being 'extremely pleasing' with all divisions making a significant contribution to the year-end result. He added that the Fane Valley Group continued to develop in a 'very positive way'.
The improved performance was also reflected in a 15 per cent increase in the net assets of the company.
Mr Lockhart says: "The 2013 year started with one of the most difficult winter and spring periods in recent memory and concluded with one of the better grazing and crop growing seasons. Farmers faced enormous challenges in managing land and livestock through to turnout, which in turn impacted on productivity levels and business cash flows. For many farm businesses it will take most of 2014 to fully recover."
Fane Valley Dairies
Mr Lockhart says: "In Fane Valley Dairies we maintained our focus on increasing the proportion of milk supplied directly from supplier farms. During the year 100 million litres were added to our growing pool. A further 50 million litres has been added since the September year-end with the overall volume now surpassing our objectives for the project
"The milk supply surge, which was the inevitable result of higher farm gate prices, is now having a dampening effect on the market demand situation as reflected in the 18 per cent fall in the GDT over the past three events. This can be expected to result in some weakening of farm gate returns over coming months as processors move off higher priced contracts."
Linden Food Group - meat processing
Sales within the Linden Food Group (including the Slaney Foods joint venture) grew by 19 per cent to reach £337 million completing another successful year of development. However since the year-end Fane Valley Group Chief Executive referred to the very significant change in the market dynamics for beef with the real impact of the 'horsegate' saga only being felt now.
"Yet again consumer confidence in beef has been rocked with the effect not being limited to the UK and Ireland. These events have led us into a whole new world with regard to customer specifications, production and processing standards and the associated controls and traceability.
"The full impact of post 'horsegate' changes within supply chains, a reduced consumer demand for beef across Europe and a lack of retailer promotional activity have resulted in a very substantial overhang of forequarter meat in the market. This has triggered a significant reduction in beef prices which is placing enormous pressure on producer and processor margins," he adds.