Arrabawn/ Tipperary merger

Arrabawn weren't able to run there own plant so I don't see how this is a good thing

there is still a possibility tirlan may takeover tipp its not off the cards, the war chest has been created, cash is king, thats if arrabawn deal doesnt progress…..

i think its actually a good fit for tirlan, tipp built top class facilities….the debt can be worked through they are just to small to over come the production issues they had, as far as im aware they sell more infant formula ingredients that tirlan

Scale and margin is the killer at liquid milk. Probably only room for 2-3 major carton milk suppliers. The push from the northern diaries has cut margin on this. Count in the drive to seasonal milk production it has hit liquid milk. About a year before the sale of kilconnel, arrabawn lost some big contracts for liquid milk to the multiples and it was the final nail in the coffin for the plant

Some amount of southern liquid milk processed from the northern side of the country now...Convoy, Killygordan, Omagh...

kilconell was closed and liquid discontinued because it was a sound business decision ….liquid was costing us a fortune yearly ….the product scare was very badly handled and it took us far too long to make decision to exit it ….but ultimately we did and it was the correct decision …..just look at our current financial position and milk price…..I understand there is still bitterness and resentment over it down that side but financially for Arrabawn it was 💯 correct decision

Because it was a **** show ran very very poorly that business should have done well

few years back maby true …..but last few years we’ve gone from strength to strength ….our accounts ,financial position ,debt level and milk price reflect it

it’s low margin cut throat business that left a loss more years than profit ……you’d find very few who would say liquid should of been held …….we’ve powered on since we got rid

the sweetener for tipp is a far better milk price and together a far stronger coop for both …..

if this all works out we will be in a very strong position …..the money spent on the casein plant and what it’s churning out has been a roaring success …….but the downside is we are heavily reliant on that success in one product stream continuing ……the product mix coming with tipp coop will add a new string and the tippagral cheese business has huge poteintal

very true ……but u still got to go and poke holes that need poking …..I’m for the merger but I have concerns …….tipp coop suppliers are in line to reap benefits of a lot of our good work last few years ……what’s in it for us …..we’re on a good thing now but I in no way want to see us going back to days of a crap milk price and propping up division 2/3 …..I’d like to see tipp coop suppliers making a 5 year min commitment to staying with new entity

It's a big ask for arrabawn shareholders to take on the debt level. The key in the proposal is how is this debt going to be managed without a detriment to milk price.

Locking in milk suppliers is a great point. Arrabawn is bringing the security to mange the debt. What is the plan with milk processing. Will all mik be processed in nenagh and close tipp towns plant??? Has Nenagh the capacity for this???Potentially the tipp town site could be sold for redevelopment. Other assets that tipp coop have would be the supermarket in the town. Does arrabawn want to be stuck in retail of sliced pans and nappies. What's the plan with the agri retail side of things. Arrabawn has spent big on new stores in athenry, nenagh and Newport over the past 10 years?? Are they going to have to spend big to support this in Tipp town or do they focus on keeping it simple. Lots of questions on where the savings are going to be made will be vital and this.

Is there much duplication going to happen initially and what the plan to create efficiency in staff cost, which is big.

Looking at it it's more questions than answers at the moment

I guarantee tirlan will be actively trying to poach suppliers at the minute, 5 year milk contract will be a poisoned apple potentially too, and could play into the hands of other processors trying to poach suppliers before any deal is done, tipp have a very loose msa at the minute and its handy enough for their suppliers to leave

huge dairygold catchment area nr tipp Town. great opportunity to poach good suppliers . big area around golden as well. many would move given poor board andmanagement in dg atm.

as an arrabawn supplier, ill be voting no. These are uncertain times, age profile of dairy farmers creeping up, cost of production through the roof, weather getting more unpredictable, signs that derogation will be no more, export of calves could be no more in years to come, lack of labour and possibly agri contractors, not to mention the nearly unmanageable regulations being enforced, why would any functioning company take on more debt in the current climate.

Diverse is not the preserve of success. Efficiency is. Have a look through the milk price leagues. Diversity is at the bottom.

If the merger agreed to jettison diversity, it could join with debt levels of under 20m.

Have a look at what each is bringing to the table, fit the pieces that fit together simply and sell what's noise around that and you'll end up staying top of that milk league for the future..…which should be the ONLY outcome being pursued.

it’s came up a few times ….were heavily exposed on casein which tbf has performed well last while ….if anything happens that we can only divert so much to butter /whey/skim

easier thing to do here would be just go after the milk pool and not bother with merger but no willingness to go this route

this is grim reading which i think every arrabawn supplier should have a look at

Tipp Co-op AGM hears details of disastrous 2023 - Premium (farmersjournal.ie)

What have Tipp in assets compared to loans would be interesting?

I would have to agree with alps re decision making. That article is grim reading but much of then problems are now in the past .... I've no skin in the game here either way but I think it's going to be a good venture for both coops. I think Arrabawn will have enough/extra milk to make tipps more efficient. Tipp were taking in milk from all over the country at stages of the year.

risk and reward ….new entity will have circa 880 million litre milk pool ….combined debt will be 75 odd million ….management ,board and auditors/accountant tell us this is very manageable

Goalposts have changed now …..milk pool to make use of processing capacity is key ….tips death close to 55/60 millio. I think but they bring a plant ,tippagral cheese and different product mix to us