The due diligence procedures, relating to the establishment of the new Lakeland: Fane Valley dairy and feed compounding joint ventures, will be completed within weeks, according to Lakeland CEO Michael Hanley.
This confirmation follows previous projections that one of the largest north:south dairy business ventures yet to be undertaken on the island of Ireland would have been completed at the end of January.
“We are talking the end of February or, possibly, sometime during March,” said Mr Hanley (pictured).
“But everything remains on track: there have been no holds or setbacks.
“It took quite a number of months for the Town of Monaghan: Ballyrashane merger to complete last year. And, in our case, we are talking about a project that is significantly larger in terms of its scale.
“The initial agreement between ourselves and Fane Valley was only reached last August. The volume of paper work to be legally scrutinised is immense. So it should come as no surprise to anyone that the associated due diligence processes are very time consuming.”
Mr Hanley confirmed that all stakeholders, including Fane Valley’s current milk supplier base in Northern Ireland, will be officially notified of the new arrangements, once due diligence has been completed.
“This will be done as a matter of course. In the meantime, it is a case of business as usual for Fane Valley’s dairy farmer suppliers.”
Mr Hanley said that the prospects for milk remain subdued.
“We could be looking at a scenario of prices remaining under pressure well into the summer. Global demand for dairy products remains strong. But output continues to jump ahead.
“There is just too much milk around at the present time. Intervention is now underpinning the EU market.
“But at some stage in the future the European Commission will bring a halt to open-ended intervention and introduce a tendering system.
“I sincerely hope that we do get to this point. We have a commercial outlet for all the milk supplied by the co-op’s farmers.
“Lakeland did subsidise producer prices in 2015. The commitment given for the year ahead is that the co-op will continue to pay farmer shareholders the best price for every litre of milk they supply.”