Company profile - North South Pig Co

North South Pig Company was registered as a company in August 2005 by three substantial producers with the aim of adding value to its output. To date, its main focus has been having cull sows slaughtered on contract, with the sides sold on to a German processor. The slaughtering is being carried out at Duffys in Gort and has been running at about 900 sows per week, bought directly from pig producers. Duffys has been receiving a payment of €25 per sow slaughtered.

Joe Rea's Pig League in the Farmers Journal has highlighted how this marketing operation has been successful and has boosted sow prices for the benefit of all pig producers on the island.

In recent months the company has also begun having young finished pigs slaughtered on contract for supply to big UK company Cranswick plc. It supplies a wide range of fresh and cooked meat products to the retail and food service sectors.

Some 300 pigs per week bought from producers in the Republic are being slaughtered at McCarrens for this business, while pigs from Northern Ireland producers are being slaughtered at Stevensons of Cullyvackey.

Contract slaughtering was a sensible point of entry for the young company as it minimises operating and fixed costs and up-front working capital. However, the ambitions of the owners don't stop there. For some time they have been investigating the feasibility of commencing slaughtering themselves. Last week's announcement by the Duffy family that it plans to exit the slaughter business means that North South must now make decisions - perhaps sooner than hoped. It must now use another operator to slaughter its pigs on contract, try to buy the Gort plant and keep it running or hope that another party buys and runs it.

The company has been building up a sizeable development fund. It has been deducting €25 plus VAT from the price of each sow it slaughters for this purpose. This is out of a typical sale price of €130 to €150 for a cull sow. This money is not to be used in the day to day running of the company. While North South has not revealed the size of this fund, it should exceed €1 million by now. Clearly, additional equity and bank lending would be required were North South interested in buying the Gort plant.

Starting its own slaughter operation would be a brave move for the company, given the high working capital costs required and the day-to-day management challenges involved.

Companies Office

The most recent documents filed with the Companies Office name the directors of North South Pig Co as Paul Gilmore, James Treacy and Oliver Leddy. Gilmore is chief executive of the company.

The documents state that the company's shares are held equally by Treacy, who farms in Tipperary; Leddy, from Cavan and Gabriel Maguire who also farms in Cavan. The company has not yet filed any accounts with the Companies Office.

The producers have also set up a sister company in Northern Ireland called North South Pig Company NI Ltd. Its abbreviated balance sheet shows net current assets of £617,357 and shareholders' funds of £619,043.