THE rationalisation in the Irish beef industry has gained pace with the acquisition by the privately owned Kepak of Agra Trading. The acquisition will boost Kepak's annual turnover by almost one-third to over Pounds 450 million.
Kepak and Agra refused to disclose the price tag on the deal. Kepak's deputy managing director, Mr John Horgan, said yesterday that the figure was not being disclosed, but industry sources speculated that Kepak paid Pounds 12-15 million for Agra's international meat trading business and meat processing plant in Watergrasshill, Co Cork. Kepak has given a commitment to maintain the jobs of Agra's 120 employees.
Agra Investments is the largest Irish meat trading company. Its subsidiary, Agra Trading Ltd, has an abattoir and boning hall at Watergrasshill, where most of the employees are concentrated. This plant has a capacity to process between 50,000 and 80,000 cattle per annum.
This will bring the capacity of Kepak up to 400,000 cattle and 2.5 million lambs at its various facilities. Agra Trading has exported meat products to Russian and North African markets, while its other operating company, Agra Packers, dealt with EU markets. Agra's trading company in Britain, the Greenfields Group Ltd, has two subsidiaries, John Wharton Meats and Auto Carve.
Mr Horgan added that the acquisition of Agra would give the company a greater geographic spread for beef processing in Ireland, adding a Munster- based plant to its Co Roscommon and Co Meath factories.
He added that the range of food materials with which Kepak was involved made them highly suitable for export outside the EU in markets that Agra had developed.
Kepak has in recent years diversified from beef and lamb processing into foods such as fresh pasta, jams, sauces, ketchup, and fresh and frozen meals.
The takeover was negotiated for some weeks, one source in the meat industry said but Agra, which is over 20 years old, was not seen as an ailing company and would not have been caught many worse than other meat companies by the BSE scares. Most of Agra's shares are thought to be owned by the company's founder, Friedhelm Danz.
Agra's pre-tax profits in the year to April 1995 were over Pounds 2.5 million, similar to the previous year, but down on its 1993 profit of Pounds 4.84 million. In April 1995, its shareholders funds amounted to Pounds 10.7 million, down on the previous years figure of Pounds 14 million.
Industry sources said that Agra probably suffered a profits fall in the year to April 1996, possibly to less than Pounds 2 million on sales of around Pounds 100 million.
A private company based at Clonee, Co Meath, Kepak has 900 employees and has increased its capacity significantly in recent years by buying into Britain and is believed to have an annual turnover of about Pounds 350 million.
In March 1996, it paid Pounds 2.6 million to a receiver for Buchan Meats, at Turriff, near Aberdeen. It counts supermarket giants Tesco and Sainsbury among its British multiples customers.
Kepak and Mr Larry Goodman's Irish Food Processers are the two largest Irish beef processors. IFP is the biggest processor in the country with turnover of Pounds 700 million in the year to March 1996, operating profits of Pounds 6.6 million and pre-tax profits of Pounds 3.5 million.
