The world's third-largest aquaculture company has agreed to acquire Gaelic Seafoods, the State's largest salmon farm business, in its first strategic entry to the business within the EU.
The Norway-based company, Stolt Seafarms, has made the agreement, subject to the company's evaluation of the assets of Gaelic Seafoods, whose Irish interests are concentrated in Galway, Kerry and Cork, but which also has Scottish interests.
In 1996/'97 Gaelic Seafoods had a turnover of £20 million sterling and describes itself as having a substantial European wholesale and retail customer base. One source said he believed that the price that Stolt paid was under £10 million, after the industry went through an unsettled period last year.
The company's vice-president of business development, Mr Oystein Steiro, confirmed that a procedure of due diligence, where the books of the company to-be-acquired are opened, was underway.
"As of now we are in a process of having a closer look at the assets of the company," he said.
A move to Ireland would allow it to increase its export tonnage to the EU without breaching its quotas.
Mr Steiro said he could not give an indication of the price being paid to Gaelic's three directors, Mr Stuart Baillie, Mr Richard Gabriel and Mr Dan Drew, after they advertised the sale last April of their company, describing it as the third-largest EU producer.
"We are in a very sensitive process of evaluating the company.
"We are not in a position to make specific comment. We are an interested party and we are having a look at the company," he said. Mr Baillie stepped aside as managing director after he was charged last January with obtaining £12 million sterling fraudulently. He is currently on bail from a Scottish court on the matter, with a court hearing provisionally set for February, according to the Crown Office in Edinburgh.
Mr Baillie, from Scotland, has a 38 per cent interest in Gaelic Seafoods. Mr Gabriel and Mr Drew, both from England, have a 57 per cent and a 5 per cent shareholding respectively. A spokesman for the company said that it was producing 9,000 tonnes of farmed salmon annually, the bulk of this coming from Ireland where it has 160 employees. "If Stolt come in here, they will come in with a view to expansion, so I would say the jobs in the medium term are secure.
"It will be good for Gaelic and it will be good for Ireland," he said. He added that trading conditions in the salmon industry had been difficult in the last year. Stolt Seafarms, a division of the New York and Oslo-quoted company, Stolt-Nielsen, had interests in the US, Canada and Chile and was the second-largest fish farmer in Norway, he said. It also had a sales organisation in Norway, North America and the Far East. Mr Steiro said that aquaculture, as an international business, had difficulties because of trade barriers and regulatory regimes. "But it is definitely an industry with tremendous potential in the longer term," he said. Stolt Seafarms was "a fully integrated company", he added, which also farmed Atlantic salmon, salmon, trout, halibut, turbot and sturgeon. Its turbot interests are in Spain, Portugal and France. The parent company, Stolt-Nielsen, had its main interest in chemical tankers, he added, and also owned an off-shore engineering company based in the North Sea.
Along with its farms in Scotland where 3,500 tonnes of its 9,000 annual tonnage is produced, Gaelic Seafoods has farms at Bertraghboy Bay, Kilkieran Bay and Ballynakill Harbour in Connemara, at Caherdaniel, Co Kerry, and at Kealncha and Roancarrig on the Beara Peninsula, Co Cork. It also has three hatcheries at freshwater locations, and two lough sites where salmon are reared to smolt stage.
Three of its farm sites were owned by the ESB and were acquired for about £4 million in 1995, with the approval of the former Minister for Transport, Energy and Communications, Mr Michael Lowry.
