21 April 1995

PIC strengthens its share of UK market

By Philip Clarke

DALGETY-owned Pig Improve-ment Company (PIC) has streng-thened its hand as market leader in UK pig breeding, taking over the third-placed operator, the Nation-al Pig Development Company (NPD).

The acquisition gives the combined outfit close to 8% of the European market, although it is being deliberately coy about the share it now has in the UK.

Trade sources suggest it has approaching 40% of the home trade in sow replacements. But even though this is over the 33% threshold at which the Office of Fair Trading might become interested, they point out that pig breeding operates in a pan-European and, indeed, a global market place.

"This argument has certainly worked for Milk Marque in appeasing the competition authorities, and it should work for Dalgety," said one observer.

Cotswold Pigs, with 20% of the GB market, was also quite relaxed, saying that companies needed critical mass to be able to keep up with world competitors. "So long as we continue to invest and do the job properly, there is a big enough market out there," said sales director Reg Joseph.

The purchase of the £15m turnover, family-owned NPD has cost Dalgety a little over £20m, made up of about £10m in cash, £7m in loan notes (to be cashed in at a future date) and £3.2m to refinance NPDs operating overdraft.

PIC, which currently has a turnover of over £150m, says it is very much "business as usual" while it runs a four-month market study to determine its priorities. NPD will remain a brand name, and the Easicare and Pigtales costings services will continue for the immediate future.

Both companies have substantial overseas interests, especially in the US where last year PIC increased breeding stock sales by 24%.

Currently PIC employs over 1000 people, owns 40 farms and has another 40 in the hands of associate companies. There are about 7500 sows in genetic nucleus herds and a further 193,000 in daughter nucleus and multiplication herds around the world. NDCs multiplication herds are focused on east Scotland, East Yorkshire and Wiltshire, half of which are owned and half contracted. (See Livestock, page 39). &#42