Cranswick Dunbia Ballymena acquisition signals intent to grow on global scale

Hot off the announcement of the acquisition of the Northern Ireland-based pork producer Dunbia Ballymena, Adam Couch, Cranswick chief executive took some time to speak about how the deal fits into the company’s plans. 

It announced the acquisition earlier this week, a cash transaction for an undisclosed sum. The transaction will be funded from Cranswick’s existing debt facilities. The Ballymena site currently employs 360 people and processes around 7,800 UK farm-assured pigs on a weekly basis. In the year to 29 March 2016, Dunbia Ballymena’s revenues were £72.4 million.

According to Couch, the Dunbia Ballymena site had been on their radar for some time, but talks only got serious during the summer. “We’ve known the Dunbia Ballymena business for some time, particularly in terms of meat supply to us. We’ve been a big customer at the plant for many years, especially over the last 18 months.

“We’ve always kept in touch with Jim and Jack [Dobson] and had conversations with them when they announced that they were looking for solutions for the overall business. We had initial discussions with them and then got into close dialogue at the end of the summer on the pieces of the business we were interested in.”

The acquisition marks Cranswick’s first serious presence in Northern Ireland, although some pigs were processed there “many moons ago”. Couch said it was an opportunity for Cranswick. “We think the site’s quite strong and we know it well. Jim and Jack have put a lot of investment into it and it’s a very tidy operation with a lot of opportunities.”

Cranswick does plan to make some financial investment in the infrastructure over the next year, but it will also be focusing on the staff and suppliers as it takes over. “It will need some investment along the way, but we’re not shy about that. The important thing is we can offer security to the site when there was a degree of uncertainty before – not just for the staff, but also for the farmers supplying pigs into the site. We’ll be looking to not only cement those relationships, but hopefully grow them and increase operation in the production.

“People know our pedigree, we’ve invested over £200m in the infrastructure of our business over the last eight years, and that’s ignoring acquisitions.”

Assuring that the 360 staff currently working at the site are secure in their positions, Couch said they would be looking to put more of a focus on training moving forward. “The site has already got a knowledgeable and established management team, so it’s just a case of integrating that into the Cranswick model.”

With Dunbia Ballymena focusing on pork, Couch said Cranswick wasn’t interested in other Dunbia divisions also currently “seeking a solution”, preferring to focus on pork and recently acquired chicken processor Crown Chicken. “We’re pork specialists with some movement into poultry, so we’re focusing on those two areas for now. We could probably see more [interest] in the poultry side as it’s still only 15% of our turnover, but that’s from zero a couple of years ago. We’ll be putting significant investment in Crown Chicken over the next two years, not just to improve existing facilities but to improve and increase throughputs throughout the operation.”

All of Dunbia’s pork exports came from the Ballymena site, something Couch is keen to continue. “We’ll be looking to explore all export markets – currently we account for 25% of UK pig processing but well over 50% of pork exports. We won’t be missing any opportunities in exports.

“We’ll be looking to continue growth in China as well as other regions, including African countries and Indonesia. The plan to grow exports continues unabated.”

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