Inside The World Of Business
Greencore may have lost taste for Northern Foods battle
GREENCORE-RIVAL Boparan may know more about the intricacies of the Irish food industry than might be expected. The managing director of its 2 Sisters company is Irish man and ex-Glanbia executive Eddie Power.
The former head of Glanbia’s meat division took up the post in November last year, having held positions at Grampian Country Food Group and turkey producer Cranberry Foods.
It seems that Boparan’s company has no problems on the cash front despite concern having been raised about Boparan’s ability to to finance its bid for Northern Foods. The mainstay of the Boparan business, 2 Sisters has just announced a £30 million investment in one of its factories in Norfolk.
Meanwhile, Greencore’s options as regards Northern Foods appear to be narrowing. Talks with Nestlé have broken down, and the company is under pressure to come up with a revised offer for Northern. There has been speculation that Greencore could be interested in Premier Foods’ own-label ready meals and cakes businesses, while teaming up with a private equity partner – traditionally a big player in the UK food industry – is also an option.
The timing of yesterday’s announcement about the appointment of a new chief financial officer at Greencore is also curious.
Geoff Doherty had announced his intention to depart the company last summer, but events were superseded by the merger announcement with Northern Foods which would have seen Northern’s Simon Herrick assume the role in the new entity. The decision to appoint Alan Williams at this point may indicate that the company no longer believes that the merger with Northern will take place.
Whatever the thinking behind the timing of the appointment, one thing that is clear is that Greencore will have to move quickly if it is to lure Northern Foods shareholders away from Boparan’s all-cash offer.
Wave of controversy afoot
Tidal energy developer Openhydro’s latest shareholder, French state-owned DCNS, has come up with its own undersea energy system that environmentalists claim could do more harm than good; underwater nuclear reactors.
DCNS recently paid €14 million for an 8 per cent stake in Openhydro, whose other backers include Bord Gáis and One51, valuing the tidal energy developer at €175 million.
The French company is chiefly known for its nuclear submarines, underwater weapons and naval vessels, but it is also designed in developing civil nuclear power technologies and is increasingly looking to build a foothold in the energy market.
It is working on the design of small nuclear reactors that can be placed on the ocean floor and used to generate electricity for “remote coastal communities”. The system, known as flexblue, resembles a stationary nuclear submarine, without the tower.
The project is very much in the early stages, but DCNS has gone to the trouble of producing a slick promotional video for flexblue.
Openhydro and DCNS are looking at plans to build a tidal energy farm off the Breton coast. It would be ironic for such an overtly green energy project to have a shareholder who is working on another system that is likely to get up the environmental lobby’s nose.
If that turns out to be the case, one suspects that Openhydro would live quite happily with the situation. It is still in the process of proving its own technology commercially, and getting the backing of a company like DCNS at this stage would have to be seen as a vote of confidence.
Skills needed Down Under
Recent natural disasters in Australia could turn out to be, almost literally, an illustration of the old cliche that it’s an ill wind that blows nobody any good – at least when it comes to Irish builders looking for work.
The continent-sized country now faces the task of rebuilding after the floods and hurricane which hit different regions there in January.
Australia is now the destination of choice for Irish people that the recession has forced back on the emigration trail, around two thirds of the 60,000 people that left last year headed for either there or New Zealand.
Confidence is not high there at the moment, according to head of privately held business at Grant Thornton’s local office, Tony Markwell. But he believes that some sectors will experience growth in the coming months.
“Industries like construction, manufacturing and building suppliers will be in high demand as those affected by the floods begin the long process of rebuilding,” he says.
This should be good news for the building workers who lost their jobs over the last four years as the industry was decimated. Some would say that it should also be good news for Irish building companies, who are looking outside the country for business.
Pat Burke, a partner with Grant Thornton in Ireland, says that Australia offers opportunities to grow internationally for building companies with a proven product and reputation.
It may not be quite as simple as that, however. Australia is far away and getting a foothold in a new market takes time. Existing operators in the market are far more likely to benefit. One Irish player that does have a business there is Kingspan, which aims much of its products at new construction.
It will be interesting to hear the company’s thoughts on that market when they announced their results in a few weeks.
Apart from that, the most likely beneficiaries will be Irish people with skills needed by the local industry.
TODAY:
United Drug holds its annual general meeting and will issue a trading statement while IBEC is hosting a debate between the enterprise spokespersons for Fine Gael, Fianna Fáil and Labour
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