Food group IAWS will establish a new operating company, Origin Enterprises plc, to concentrate on its original agribusiness and non-lifestyle food activities. Laura Slattery reports.
The wholly owned subsidiary will have two divisions: Origin Agribusiness, which will comprise IAWS's feed ingredients, fertiliser blending and agricultural supplies businesses; and Origin Food, which will include the business of Shamrock Foods and IAWS's 50 per cent interest in Odlum Group Milling.
Tom O'Mahony, who has been IAWS chief operating officer since 2004, will become chief executive of Origin and will join the IAWS board.
IAWS said its aim was to provide additional momentum to the businesses and facilitate their development.
Since the group purchased Cuisine de France in 1997, it has concentrated on developing its food-on-the-go businesses, most of which involve the supply of par-baked goods to the food retail and food service industries.
In this time, the company has not made any significant investment in its agribusiness division.
Last week's announcement that the group has bought US bakery Otis Spunkmeyer appeared to confirm that its interest lay in further developing its lifestyle foods business.
IAWS chief executive Owen Killian said setting up Origin as a discrete business would give it the focus to develop the original activities of the group.
IAWS chief financial officer Patrick McEniff said the business had a strong operating cashflow of €43.1 million.
Turnover for the businesses that will transfer to Origin was €819 million for the year ending July 31st, 2006, while operating profits for the period were €36.4 million.
Origin will seek both to grow organically and look for investment opportunities in a move to enhance shareholder return.
The subsidiary will have the benefit of a substantial operating asset base, including a number of properties with development potential.
IAWS owns 30 acres of land in Cork near the city's docklands that have development potential and have been earmarked for future development.
The group's animal feed operation R & H Hall, its fertiliser business Goulding Chemicals and Odlum Group Milling are located in the city.
Davy Stockbrokers said it would make no change to its earnings forecasts, as Origin will be 100 per cent owned by IAWS "for the foreseeable future".
Shares in IAWS climbed 35 cent yesterday to €17.60, a rise of more than 2 per cent.
