Co-ops to make marriage vows

The seal of approval for the merger of Midwest Farmers Coop and Nenagh Co-op will be given at special general meetings of the two co-ops tomorrow. Members of the two co-ops have already voted overwhelmingly in favour of the merger, but a second meeting is required to give formal approval of the merger to create Arrabawn Coop.

At the first general meetings of the co-op members last month, Midwest members voted 85 per cent in favour while the margin in favour among Nenagh members was 97 per cent. After the merger, Nenagh members will own 68.5 per cent of Arrabawn with Midwest members holding 31.5 per cent. Midwest members are also to share in the distribution of the co-op's £3.8 million (€4.8 million) surplus.

When the amalgamation is passed, as now seems likely, customers of the existing Nenagh and Oranmore milk and dairy products brands will continue to be able to buy those brands in the shops, as the brand names on the milk, cream and butter products will not change.

The new Arrabawn Co-op will have a milk pool of 51 million gallons from suppliers in Galway, Tipperary, Offaly, Limerick and Clare and turnover of more than £105 million. Nenagh is the larger of the two merging co-ops with turnover of £73.8 million against Midwest's £31.6 million. Nenagh is also far more profitable with operating profits last year of £608,000 against Midwest's £42,000.

The merged enterprise will aim to generate annual savings of £850,000 with butter production being centralised in Nenagh and milk processing in a new plant at Kilconnell.

Arrabawn will begin life with a 63-strong board of directors - 39 drawn from Nenagh and 24 from Midwest. The board, however, will elect a 12-strong executive committee to manage the day-to-day operations of the co-op.