IAWS plans £20m investment

AGRI BUSINESS groups IAWS is to invest £20 million in its businesses in a drive to expand and boost competitiveness. The plan includes a major investment in the Bolands flour mill and a new food distribution centre in Dublin.

The company also announced yesterday that it was forming a strategic alliance with Cultor of Finland, a technology orientated nutrition company which is capitalised at $800 million (£506 million).

IAWS will provide technical back up to Pacific Protein, one of its subsidiary companies in Chile. IAWS has an option to buy 50 per cent of the subsidiary in two years, for a figure in the region of $15-$20 million (£9.5-£12.6 million).

Speaking after the company's annual general meeting in Dublin yesterday, IAWS chief executive Mr Philip Lynch said the agreement would allow the group to develop its knowledge of the South American market at first hand, without having to commit a substantial amount of money up front. He said more than 50 per cent of the world production of marine protein is generated in South America.

The £20 million capital in vestment programme will be spread around IAWS's four core business areas - fertilisers, proteins and oils, animal feeds and food. It includes a major investment in expanding R & H Hall's feed ingredient importing facilities in Dublin.

The Bolands mills investment will consolidate all of IAWS flour milling business in one location. The company claims that Bolands will be the largest and most efficient mill in Ireland when the programme is complete.

Mr Lynch said the company was looking for acquisitions - it has free cash flow of £15 million - but added nothing was to happen for three or four months.

Mr Lynch said the company was interested in food manufacturing companies because it would like to bring the food element "further up the scale" of its core businesses. The food element of IAWS had been growing at 12-15 per cent a year over the past few years.

IAWS is understood to be interested in taking over Williams Waller, an animal feed group. Mr Lynch said IAWS had signed a confidentiality agreement, along with other companies, and could not comment on the matter.

Mr Lynch said the company was looking at possible acquisitions abroad, but its acquisitions over the next three to four years would be in Britain and Ireland.

IAWS was tipped as a possible buyer for Lyons Irish Holdings, along with Allegro, but the eventual winner was Unilever. Mr Lynch said IAWS had been a bit disappointed. It would have been a good opportunity at the right price, he said, but the price was not right for IAWS.