Ireland’s Kepak Group has acquired the red meat business of 2 Sisters from Boharan Holdings in a deal the company is calling “both a Brexit and a currency hedge”.
The addition of the 2 Sisters business will provide a source of UK raw material for Kepak’s value-added operations which include 16 manufacturing plants located across both Ireland and the UK, and which supply Irish, UK, and European customers.
Founded in 1993, 2 Sisters’ brands include Donegal Catch, Green Isle, and Fox’s Biscuits, and its red meat business was acquired in 2013 when 2 Sisters acquired VION. Operating from four production locations across Scotland, Wales, and England, and with a storage facility in Truro, the red meat business processes and markets approximately 250,000 head of cattle and more than a million lambs per year, sourced from more than 13,000 farmers ranging from Scotland to Cornwall.
John Hogan, managing director of Kepak Group, commented on the deal, saying, “The acquisition of this red meat business, with its very solid UK retail, foodservice and manufacturing relationships, marks a very significant next step in delivering on our strategy. It is a great fit for Kepak. The addition of these facilities to Kepak Group significantly increases the value and scale of our business.
The sale of the business come about a year after 2 Sisters was the focus of a food safety scandal, in which it was alleged that the company was selling chicken that was past its sell-by date by altering the slaughter date of poultry being processed, reports Food Ingredients First. Soon after, Ranjit Singh Boparan, CEO of 2 Sisters Food Group, stepped down from his position to become president of its parent company Boparan Holdings, making way for Ronald Kers, former executive with Nestlé, to assume the reins.
“This deal represents another major step in transforming 2 Sisters and building a better business,” said Singh. “Kepak Group is the ideal home for our Red Meat business and this deal is a perfect strategic fit for them.”
The Kepak Group states that the deal for 2 Sisters’ red meat business will significantly increase the company’s value and scale providing multiple synergies, while also strengthening the group’s supply chain partnerships in the face of an unsure post-Brexit landscape.
A smart move to make, given that on Sunday, July 29, The Guardian reported that the UK government was working to secure adequate food supplies in the event of a no-deal Brexit as negotiations continue with Brussels. If a no-deal Brexit does come to pass, it would put the UK in a difficult position, as only about half of the food consumed in Britain is produced in the country, and 30 percent of its food is imported from Europe.
“There’s no space to store food. Supply chains are extremely fragile,” Helen Dickinson, chief executive of the British Retail Consortium, told The Guardian
In light of this possible fallout, a move such as this on the part of the Kepak Group – to not only expand its scale and to raise its value, but to ensure a supply chain – is strategically savvy.
-Lynda Kiernan