One of Irelands’s largest producer of chickens, Cappoquin Chickens, is to close, raising fears over the long-term future over the Irish broiler sector.

The 50-year-old Irish poultry processor went into liquidation on 2 September with debts of €7-8m (£5.6-6.4m) and the jobs of 250 staff in doubt.

The official liquidator, Deloitte, kept Cappoquin trading while attempting to find investors. A growers co-op tried to raise funds, but Derby Poultry was a front runner in the bid to rescue the company.

Derby management did not want to comment on the confidential negotiations. But Poultry World understands that Derby initially wanted to invest in Cappoquin and once the ailing company went into liquidation Derby wanted to buy Cappoquin and keep it running and retain staff, thus keeping growers, breeders and suppliers in business. However, Derby was disappointed that this was not achieved.

cappoquin

“Cappoquin management just couldn’t get the sums to add up to be able to compete in the marketplace,” said Ned Morrissey, chairman of the Irish Farmers Association (IFA) Poultry Committee. “They are competing head-on with imported products, selling into a market that is completely flooded with imported product.”

Mr Morrissey said that the growers have little future in the broiler business as they are too far from any of the other Irish poultry processors (all in the north of the country) to be viable. Many are second generation growers.

“It is a huge blow, really it is like a funeral in Cappoquin. The loss is so great to the area – to the whole of West Waterford,” Mr Morrissey told Poultry World.

Forty growers and 10 breeders entered an agreement with the liquidator to guarantee payment to rear birds to processing, however, as of mid-September no new birds were placed as the company’s operation was wound down. When the company initially got into trouble and was placed in examinership, growers and breeders lost up to €50,000 (£39,700) each. Millers were also owed money.

The O’Connor family owns the business which processed 220,000 chickens per week. It paid out up to €7m (£5.6m) annually in wages and €1.5m (£1.2m) to chicken producers.

Increased costs of feed and energy, coupled with lax laws in relation to food labelling and importation of cheaper chicken fillets, have been blamed for the crisis for the business which had turnover of €26m (£21m) in 2006.

This is the latest in a series of closures which has seen major poultry processors go under every year for the last five years in Ireland, including Castlemahon Chickens in west Limerick. The IFA believes it highlights that the €200m (£157m) Irish chicken industry is in real danger, as cheap imports, which do not satisfy the same high standards as Irish chicken, are flooding the country.