Speculation continues in the beef industry that Dawn Meats is in talks to buy Kildare Chilling.

Speaking at the recent ASA conference, Dawn CEO Niall Browne said Dawn wants to expand and has markets for beef. Dawn has added a UK factory every year for the past three years.

After consolidating in recent years to drive efficiencies, Dawn operates only four of its seven abattoirs across Ireland. Dawn’s factories are currently operating at about 80% capacity, unlike other industry competitors operating at 50%.

On the other hand, Kildare Chilling with one factory, albeit the single largest plant in the country, relies on selling carcases to third parties rather than selling direct to blue chip customers. This poses a challenge for Kildare as large retailers since the horsemeat crisis want to streamline suppliers and vertically integrate.

Kildare Chilling

Kildare Chilling, founded in 1951, is now owned by Tom McParland who bought it in the 1990s. It is understood that McParland now wants out. According to latest filings, the company’s other directors are George Ryan and Patrick Whelan.

The plant was on a 100-year leasehold owned by the National Stud, but this was bought by the company about three years ago.

Kildare has about 5% of the national cattle kill with a capacity to kill in excess of 500,000 sheep and about 120,000 cattle per annum. Last year, it slaughtered in the region of 80,000 cattle.

It traditionally catered for the large numbers of sheep reared on The Curragh and in the surrounding areas. However, in recent years, against a backdrop of falling national sheep numbers, its sheep kill has grown significantly against the trend. Last year, it killed in the region of 550,000 sheep.

Kildare Chilling traditionally relied on intervention, export refunds and exported to third countries such as Egypt in the 90s. Over the last 10 years they have traded more with other factories.

Dawn meats

Dawn is a privately-held group of companies owned by the Browne family and the Queally Group. Established in 1980, it has four primary processing plants in Ireland (Ballyhaunis, Granagh, Rathdowney and Charleville) and six primary processing facilities in the UK. It it also in negotiations with the French-based processing company Elivia to secure a non-controlling shareholding. The Grannagh, Co Waterford-based company, also has marketing offices across Europe and employs 3,300 staff in 12 countries.

It has a wide product portfolio, selling to the major retailers. Turnover is expected to be over €1bn this year.

In 2012, the company signed a €300m five year contract with McDonalds to process up to 18,000t of beef annually. This makes Dawn one of the largest suppliers of beef to McDonald’s in Europe.

Dawn currently has around 23% of the national beef kill slaughtering in excess of 500,000 cattle per year. Should this subsequent purchase of Kildare be successful, it would see Dawn become the largest beef processor in the Republic of Ireland with almost 30% of the national beef kill.

The move would also give them the potential to slaughter in excess of 800,000 lambs per annum, or 30% of the national sheep kill.

The consolidation will naturally be of concern to farmers with a successful outcome delivering Dawn, ABP and Kepak up to 65% of the national cattle kill.