McCarren Meats were putting their best foot forward yesterday evening as two government ministers arrived at the site to inspect the impact of €15 million investment by Kepak Group.
The oldest pig business in Ireland hosted a media and stakeholders event at the Farnham Estate Hotel, welcoming Agriculture Minister, Michael Creed, and his colleague Minister Heather Humphreys.
Kepak CEO Sean Coffey told the Celt that the injection of cash since they became the majority shareholder in the Cavan Town company in 2013 has resulted in a 40% increase in capabilities and capacities. This has translated into an increase from 194 jobs four years ago to 269 today; an increase of almost 40%. Mr Coffey, who is proud of his Cavan roots, noting that his mother was born and bred in Kill and he has family in Ballyjamesduff, jokingly notes that the staff increase is reflected in the carpark, which he acknowledges they will have to address.
Mr Coffey refrained from putting a figure on their share of the business but confirmed that, along with the McCarren family, who have been running the business for five generations since 1860, they are the only two shareholders.
He explained that the primary processing company invested in McCarrens to expand their business into the pork sector.
“We have a 16-17% share in the beff kill, and we have a 20% share in the lamb kill. This share at McCarrens offered us the opportunity to stick with what we're good at, which is primary processing, but also give us a meaningful share in the Republic of Ireland pig kill – we've grown it to 10%.”
He says that the factors behind the increase in output and jobs are twofold.
“Twenty per cent of the output is now traded in Kepak sister companies – so that's a significant volume McCarren's would never have done before. But as importantly, the remaining 80% is now traded with Kepak partners – so it's a complete change in the mix for McCarrens.”
For example rather than sell legs of pork and the carcases four quarters, they now carry out much more extensive processing at the plant. The throughput has also increased significantly to the stage where they are killing approximately 350,000 pigs per annum.
Kepak Group claim they are now contributing more than €35million annually to the local economy in Cavan and surrounding counties.
While the company has a great news story to tell for the community and workers, the Celt asked if it has equally good news for pig suppliers. The IFA recently claimed that after a positive first six months in 2017, in recent months, factories nationwide have cut prices by 20c/kg. The IFA put average prices around 157-158c/kg, while price of production is estimated at 150c/kg, and note that many endured loss making years in 2015 and 2016.
Mr Coffey says they will “always endeavour to pay the best price going” in a competive market, and says that they are currently paying “about 160ish”.
“Irish processors don't set the price in a global context, and we, Kepak, are only 10% of the Republic of Ireland share, so we dont decide the price in the market place...
“Our aim is to build a sustainable future for our business, which includes our stakeholders – our primary suppliers, so that they get a fair return.”
He says that the farmers can play a role in achieving a “fair return” by being “particularly efficient themselves”, but he also says the company have a role.
“Our strategy is very simple, and we have demonstrated it with the beef in the past – we try to add value and where at all possible we pass that value back to our partner farmers.
He added: “We recognise we only have a future if we pay a farmer a sustainable price.”
In terms of value added product he points to the work undertaken by Cavan farmer Luke Bogue in rearing a new Hampshire pork breed. Kepak are also promoting new products, such as pork ribs, at their slow cook facility in Cork.
“So that's how we add value – by taking a pork rib, which was a very inexpensive item a few short years ago, to now where that pork rib – the piece of bone that came off the loin - is now more expensive per kilogramme than the loin.”