Dairy group to axe 146 jobs
Almost 150 jobs are to go at the Lakeland Dairy Group in the north-east of the country, it was confirmed today.
As part of restructuring of the business a number of Lakeland facilities will be closed or amalgamated with other facilities with Cavan, Longford and Monaghan hardest hit.
The company said it was taking the initiative to sustain a viable dairy industry in the area and added the cuts were necessary to bring down costs, return to profitability and maintain competitiveness.
In all 146 jobs will be lost.
Michael Hanley, Lakeland chief executive, said the cuts were about sustainability.
“Taking these decisions now will strengthen operations and improve our competitiveness for the future. The maximum efficiencies and savings will only be achieved by closing full sites,” he said.
“It is a painful process but it must be achieved in full.”
Mr Hanley went on: “While we very much regret the need for redundancies, we have taken this decision for sound business reasons to ensure commercial competitiveness and to maximise the milk price that we pay farmers in a dairy industry where considerable uncertainty still exists for the future.”
In a statement the dairy group said: “Volatile markets, driven by the Fischler reforms, intense competition from New Zealand and Australia, increased energy costs and reduced EU supports, have each had a heavy impact on dairy processing margins and milk prices for farmers.
“This plan is necessary to sustain a viable dairy industry for the future in the north-east of Ireland.”
It is hoped the cuts will bring about savings of €8.5m a year from 2008.
Operations in Monaghan, Cavan, Leitrim, Longford, Louth, Meath and Westmeath will be worst hit.
From July 31, 2007 onwards, Lakeland will cease milk drying operations at Lough Egish, Co Monaghan with operations moving to processing sites at Bailieboro, Killeshandra and Newtownards.
Sixty jobs will go at Lough Egish in 2007, 22 at Castlebellingham and the remainder across the wider organisation.
The company said the restructuring will cost €10m for severance payments, organisational changes and investment in processing systems at alternative sites. It is anticipated it will be recouped in savings by early 2008.
Mr Hanley added: “There is no realistic alternative to the measures that have now been set out. We are obliged to be as cost-efficient as possible so that we can return the highest possible price for milk.
“We cannot stand still while facing the external market pressures which exist. We must work towards a future where only the leanest dairy industry players will be able to operate successfully so as to provide a viable future for the maximum number of dairy farmers. That is our primary goal.”
