THE RISE AND FALL AND RISE OF DAIRYGOLD

Dear Editor,

When Mr Henchy was employed as general manager of Dairygold/Reox/Alchemy it was well known and well flagged by this and other scribes that his track record was as a hatchet man.

Dairygold knew this and this is exactly what it needed at the time. It had grown into a sleeping giant, being bled from every limb and ripe for consolidation. To give Mr Henchy his due, he carried out his job with ruthless efficiency, some would say overly so in the case of both Galtee and the Clonmel Road Cheese facility.

Yet Mr Henchy did Dairygold some service. The various parts sold were sold mostly during the height of the Celtic Tiger years and full value was obtained for them. If he had delayed any and these were sold now they would realise only a fraction of what they did.

The sale of profitable sections was a grave error. Many of these should have been reformed, modernised and built up, not sold. Also, the closure of Galtee was both unwise and unnecessary and a huge blow to the town.

But from adversity springs new shoots. John Finn’s meat factory is one that is partly filling the gap and giving good employment locally. Mervin Hodgins’ sausage enterprise is another. These small family run enterprises are the future of towns like Mitchelstown.

With the sale of the Breeo brands to Kerry Foods, Dairygold’s remaining enterprises are cash stable and secure. The existing debt of €145m is all but cleared by the sale at €140m.

Apart from the land holding company, Alchemy Properties and the retail trading company 4Homes, Dairygold’s remaining enterprise is concentrated in commodity milk products, milk powder, casein and whey extracts. While this is a profitable business in the medium to long term, it was a grave error by Mr Henchy to put all his eggs in this one basket, susceptible and ravaged as it is by the global trading environment.

In short there is little more Dairygold can do to make this profitable, except to invest in more modern production facilities and ride out the downturn. This is what Dairygold are doing and have lodged a planning application to do this at the Castlefarm plant.

But Dairygold also need to diversify into added value products such as cheese, yogurt and other retail products. The facility at Clonmel Road should be capable of development for this purpose.

Dairygold are fortunate in this respect that there are still cheese makers in Mitchelstown who have the know-how to make these, and this it must do if it is to survive any other economic bust. People have to eat, and if Dairygold can invest in new modern efficient production facilities at Clonmel Road, it can generate both jobs and profit. Rumours abound that Dairygold will sell out to Kerry Foods. I do not see this happening in the short term.

Having given control to an outsider (Mr Henchy) for a period of time, the committee will not lightly give control to another (Kerry) in the short term at least. Mitchelstown’s Castlefarm plant is the most modern efficient production facility it has.

This was not achieved by judicious decision making by management, but as a result of being dragged screaming on foot of concerted efforts to get it to do so and is still a job in hand.

There is a ready land bank for future expansion and Mitchelstown is well placed at the centre of Munster, if not the south of Ireland to compete well in any territorial war. Its future, even if sold to Kerry, Glanbia or Avonmore, is I believe secure. Given its lean shape and negligible gearing at the present time, it could, with the right leadership, do the reverse and buy out synergistic sections of Kerry, Glanbia and Avonmore.

What the committee must not do is to think that it can profitably run what remains of Dairygold and it must appoint a new chief executive as soon as possible, someone with a penchant for judicious product development and careful expansion; a Denis Brosnan.

It must also listen to its customers and be customer focused. Farmers are hit by reducing milk, meat and crop prices at the present.

If Dairygold will not pay the price for milk, farmers must reinvent the co-op movement and establish small pasteurising facilities, eliminate the middleman and distribute and sell directly to customers giving them around 60c/litre instead of Dairygold’s 15c.

These family run facilities would give local employment concentrated in family members and bring back enterprise at local level. The surplus can be sold to retail multiples or Dairygold.

The same can be done in the meat, poultry and crop industries and sold at local traders markets, etc. Labour intensive, yes, but are jobs not what we want at this time? John Finn, Hanley’s, Mervin Hodgins and, to a degree, Michael Horgan’s are examples of this type of production/manufacturing and are the future of towns like Mitchelstown.

From adversity springs opportunity and this is what Dairygold and others must do.

Yours sincerely,
Kevin T Finn,
Kingston Close,
Mitchelstown.

BANK BRANCHES MUST NOT BE LOST

A Chara,

The ongoing crisis of confidence in banking and potential further restructuring of banks must not result in the loss of the traditional branch structure. When the dust finally settles it will be vital that the branch network as we know it in towns throughout the country would be allowed to maintain vital relationships with individual customers and small businesses to ensure that local economies can flourish. There will be a temptation to close branches throughout the country and centralise services to Dublin. This would be detrimental to ordinary customers and small businesses who maintain strong relationships with individuals in branches. We are witnessing a creeping centralisation of lending policy whereby small businesses are receiving approval for credit but are being stymied once a decision is passed on to the next level. In my view, the anecdotal evidence suggests that the upper tiers of banking are not reflecting the decisions taken at branch level. I have come across evidence of many situations where positive lending decisions are being made at branch level but then vetoed further up the line. If local economies are to get back on their feet, credit will have to become available to small businesses and individual customers. Bankers must not be so cautious as to risk killing business at ground level.

Yours sincerely,
Sean Sherlock TD,
Labour Spokesperson on Agriculture and Food Cork East,
Flemings (Davis) Lane,
Mallow,
Co Cork.

LOOKING BACK

Dear Sir,

For my friends in sport: This writer remembers the years ’57, ’58 and ’59 in downtown Fermoy and the R. Blackwater, ‘how it stank like hell’. I remember the open space of the Market Field in the town centre where we sported and played hurling on fine afternoons after school.

It was during the 11th, 12th and 13th years of age. I am, of course, referring to Pat Dermody (MacCurtain Street) and his friends. Pat, being such a great character, and so influential, and so proud of Kilkenny hurling teams, ensured that it was always only hurling that we played in the Market Field.

Pat used to bring a bunch of lads down from Cork Road to challenge Tomas Murphy’s market team. We were all fired up for those matches. Flying into a rage was common place – an ordinary or common thing. You see, we had no referee. So, tempers flared. There was often a walkout and everyone went home. Sad! We were only 12, for example.

The hurlers that Pat Dermody brought together on the Market Field in the late 1950s were the following: Tom Cannon (Devlin Street), Tomas Murphy (Emmet St), Arthur ‘Forty’ O’Mahony (Emmet St.), Ciaran O’Connor (Bakery, Patrick St.), Tom McAuliffe (Patrick St.), John A Ahern (Chapel Sq.), Tomas Murphy (Market Place), Tomas Crotty (Patrick St.), Philip Fitzpatrick (Cork Road), Terry Doyle (O’Rahilly Row), Noel McAuliffe (Patrick St.), Michael Foley (O’Neill-Crowley Quay), Finbarr Holland (Cork Rd.), Diarmuid Kelly (Patrick St.), John O’Grady (Kent St.), Anton Walsh (Patrick St.).

Other names escape my memory. We lived for a game of hurling in ‘The Market’.

After his childhood hurling days, Pat went on to Fermoy CBS Secondary School where he was a very popular student, graduating with honours. A keen musician, he became conductor of the Garda Band.

Then, he joined the army and became conductor of the Army Band. A cheerful and very decent man, this writer met him once since 1961. He was the son of Martin and Sheila Dermody and the brother of Norah.

He passed away in mid-February this year. Always remembered by his hurling friends of the late 1950’s in the Market Field, Fermoy. Cork and Kilkenny Abu!

Well done Pat.

Yours sincerely,
Tom McAuliffe,
‘One Cool Cat’
13 Cluain Dara,
Fermoy.