Arrabawn in merger talks
Former Teagasc Director Gerry Boyle has said that the merger of Arrabawn and Tipperary co-ops makes sense at every level, for the co-ops themselves, for suppliers and for customers.
The Borrisoleigh man, who is an Independent Non-Executive Director at Arrabawn and one of the most trusted experts in the dairy industry, said that he fully supports the move and that it would lead to greater product diversity and quality as well as long-term sustainability for all.
“Ultimately for me, this makes absolute sense, for Arrabawn and for Tipperary,” he said. “The two as one entity will be much stronger than they could ever be individually. The most obvious reason for this is that the combined milk pool will strengthen the co-ops for the future.
“Both Arrabawn and Tipperary have invested significantly in their plants and this will allow for greater volumes to be processed as the single entity combines and then grows. This will, essentially, maximise those plant investments and that works to the direct benefit of Tipperary and Arrabawn suppliers.
“A subsidiary point here also is that Arrabawn, for example, has had massive success with its Casein product, a success coupled with the plant investment that has allowed it to pay one of the top milk prices in the country. This, needless to say, is what all supplies want. But the merger would enable Arrabawn and, in turn, Tipperary to broaden their product base and that’s always a strength when you’re in a volatile market.”
Professor Boyle also said that being neighbours matters. “Geography matters, and in more ways than one. The very fact that the co-ops are neighbours does count for something. It’s very much in the spirit of the integrity of the co-op movements that neighbours would combine, not least with so much in common, that are like-minded and very much part of the same wider community and culture. I also very much like the fact that they would come together in a way that would respect what each brings to the table, right up to establishing a board with representation from each of the two co-ops.”
The merger would also strengthen sustainability, he said. “This merger is a recipe for enhancing sustainability across the value chain. There are three essential links to that chain, the raw material, transporting it and the production. At all three levels we can enhance the collective sustainability. Arrabawn already pays a sustainability bonus to farmers so anything that can be done here this area will also be beneficial to suppliers.
“What’s also worth remembering here now is that the level of investment undertaken by Arrabawn a number years back, an investment programme that some questioned if it was too ambitious, has delivered hugely for suppliers. As a result, they now find themselves at the top end of the milk price league. There’s a track record of making brave decisions that ultimately deliver a significant return.”