ARRABAWN CO-OP has agreed to buy the Dawn Dairies milk business in Co Galway from the Kerry Group in a deal understood to be worth between €5 million and €6 million.
The company yesterday entered a 30-day consultation process with Dawn Dairies employees ahead of their transfer to the co-op.
Arrabawn chairman Michael Flaherty said the purchase would be very positive for the co-op and claimed that it would strengthen its position in the market as the liquid milk division played a very important role in its overall business.
“Economically, this acquisition makes enormous sense as the Arrabawn and Dawn milk collection and sales operations overlap geographically in many areas.
“By rationalising the businesses there are significant savings to be made,” Mr Flaherty said.
The efficiencies being sought include maximising production volumes at the plant at Kilconnell, Co Galway, which has spare capacity and where milk volumes will double, as well as eliminating duplication in milk collection and retail distribution in the region.
The statement added that the increased throughput at Kilconnell would lead to additional employment there.
However, the acquisition was also likely to lead to the loss of some jobs.
Mr Flaherty emphasised that the acquisition of the Dawn businesses would ultimately improve the stability of Arrabawn.
He said the move would secure employment in the longer term in a market notable for intense competition and which was likely to be affected by further mergers and acquisitions.
