Arrabawn, the dairy co-op that will emerge from the merger of Midwest Farmers' Co-op and Nenagh Co-op, aims to generate savings of £850,000 a year, the document issued to shareholders reveals.
It shows that Nenagh's members will own 68.5 per cent of Arrabawn with Midwest members owning the balance. The combined co-op will have a milk pool of 50 million gallons drawn from suppliers in Galway, Tipperary, Offaly, Limerick and Clare.
Arrabawn plans to establish a state-of-the-art liquid milk processing plant at Kilconnell, Co Galway, and a despatch store at Oranmore, Co Galway. These projects will involve a once-off cost of £1.9 million. Butter production will be centralised in Nenagh.
Nenagh Co-op had sales of £73.8 million and operating profits of £608,000 last year while Midwest had sales of £31.6 million and operating profits of £42,000. Net assets of the combined group total £21 million.
Midwest's members will benefit from the distribution of its surplus of £3.8 million.
Members of both co-ops will vote on the merger proposals at meetings on December 11th, with 75 per cent of each ballot required for the merger to be approved.
Such approval seems likely given the strong endorsement for the proposals from both co-ops' steering committees. The merged group will initially feature one of the largest boards of directors of any organisation in the State with 63 members - 39 drawn from Nenagh and 24 from Midwest. That board, however, will elect an executive subcommittee with 12 members - eight from Nenagh and four from Midwest.
Arrabawn's first chairman will be nominated by Nenagh and will hold office until the annual general meeting in June next year. For the following two years, Midwest will nominate the chairman with Nenagh nominating the chairman for the subsequent two years.
After that, the board will nominate the chairman irrespective of his original co-op representation. The head office of Arrabawn will be in Nenagh.
This is the second dairy co-op merger this year and follows the link-up between North Connacht Farmers and Kiltoghert to create Connacht Gold.
