THE RECEIVERS appointed to failed meat producer Olhausen are hopeful of attracting buyers for parts of the business, which has been in existence since 1896.
Jim Hamilton and David O’Connor of BDO yesterday became joint receivers and managers of Dublin-based Olhausen, following a request from its board to Ulster Bank.
The bank is understood to be owed more than €10 million. Some 160 jobs have been lost across three processing plants.
Directors and shareholders at the company include prominent accountants Pearse Farrell and Greg Sparks of RSM Farrell Grant Sparks, who invested when the families that then owned the business sold in the mid-1990s.
In a statement, the receivers expressed regret about the closure, adding that they would now seek a buyer for the assets that remain at the business.
The company had lately been in negotiations with two potential buyers, thought to be Larry Goodman’s Irish Food Processors and Mallon Foods, but was unable to agree a deal on time for it to continue as a going concern.
Ulster Bank in recent days received an offer of €1 million for the company from Monaco-based financier Michael Flacks, but that was rejected. Mr Flacks, who earlier this year led a takeover of clothing chain A-Wear, yesterday said “it was another sad day for Ireland”. He had, he added, planned to expand the business but declined to comment on whether or not he remained interested in it.
It is highly improbable that Olhausen will be purchased outright, but existing contracts and the company’s name are likely to be particularly attractive to potential buyers. As well as Olhausen, the company owns brands such as Kearns and Byrnes. It made own-brand sausages for Aldi, Lidl and Dunnes, as well as operating a food service business.
The receivership means the closure of the company and the immediate loss of about 100 jobs at Olhausen’s headquarters in Dublin’s Blanchardstown, some 30 in nearby Coolock and another 30 in Lough Egish, Co Monaghan.
Siptu, which represents 100 of the employees, has negotiated with the receivers for the payment of wages due and, along with the receivers, is assisting with statutory redundancy applications.
The workers officially learned of the closure at 7am, but Olhausen’s difficulties had been recognised in the industry for some time as commodity prices rose and margins became ever-tighter.
The company received a short-term lifeline a few months ago when additional funding was provided by Ulster Bank and by some of its shareholders, while NCB was appointed to find a buyer around the same time. For a period, the business was cashflow-positive but further commodity price rises in September hit hard.
Olhausen is known for its sausages and began life when a German immigrant set up a retail butcher’s shop in Dublin’s Talbot Street, before expanding to focus on wholesaling pork-based meats.
The most recently available accounts for the company show that it lost almost €170,000 in 2010 on turnover of €30.6 million.
From bloom to bust sausage makers feel the squeeze
COMPETITION FROM discount supermarkets, the demise of breakfast roll man and wafer- thin margins in the pigmeat industry are all factors in the receivership of one of Ireland's oldest sausage makers.
Olhausen's began as a Victorian butcher shop in Dublin's Talbot St in 1896. It features in Joyce's Ulysses when Leopold Bloom ducks in under the Olhausen's rollshutter as it's closing and comes out holding a parcel in each hand, in one a "lukewarm pig's crubeen" and in the other a cold sheep's foot.
The latter-day Olhausen operation supplied most of the ingredients on the "full Irish" breakfast plate to butcher's shops, supermarkets and convenience shops. As well as its branded Kearns, Byrnes and Olhausen sausages, it was supplying pork and other meat products to the foodservice sector – hotels, cafes and garage forecourts – which thrived in the too-busy-to-cook days of the boom.
A recent Bord Bia study showed that 55 per cent of people bought hot food from deli counters in 2007 but that fell to 45 per cent last year.
Olhausens responded by introducing a traditional Polish sausage and a microwaveable back bacon in recent months.
Kildare sausage-maker Jane Russell described the news as "terribly sad. It probably shows you how hard it is to be at that end of the business where margins are so tight."
A retailer selling sausages at about €5-€6 a kilo to the consumer is likely to be getting a 30 per cent margin, giving the supplier a price of about €3.50-€4 a kilo. A large processor like Olhausen was likely importing frozen pigmeat, buying it on the futures market, where it is priced seasonally.
Olhausen was hit hard by the dioxin pigfeed scare in 2008, issuing protective notice to staff after the crisis forced it to withdraw its products.
Even without that setback competition has been fierce, with Lidl and Aldi selling large amounts of cheap sausages.
CATHERINE CLEARY
