Wiseman shows fresh interest in Express Dairies

Published on Sunday 3 February 2002 00:00

Dairy chief announces management shuffle amid speculation of a counter-bid for rival

DAIRY boss Robert Wiseman has refused to rule out involvement in the bidding war for arch-rival Express Dairies.

And he has reorganised the management team of Robert Wiseman Dairies to push forward his new growth and acquisition plans.

Speaking exclusively to Scotland on Sunday, Wiseman said: "We’re sitting back and waiting for new developments. The company has grown rapidly over the past few years, and our aim is to maintain this pace of development as we move forward.

"This reorganisation is a key component of our plan to ensure that we continue to work efficiently, and are able to react quickly to opportunities that arise within our industry."

Robert Wiseman Dairies is the UK’s fastest growing dairy company. Wiseman, the managing director, has reshaped his 12 departments into three business units, led by Billy Keane, group finance director, who will look after finance, IT and purchasing. Martyn Mulchay, operations director, will cover production and distribution operations, including milk collection; and David Dobbins, commercial director, will take responsibility for sales, marketing, human resources and business process.

Wiseman said: "Our appetite for growth and success in what has become a fiercely competitive market place is very strong, and this reshaping of our existing team allows us to have the right people in the right roles to ensure that we realise our full potential over the coming years."

Recent speculation links Wiseman to Express Dairies, the UK’s largest liquid milk supplier, which is embroiled in a take-over war following a 100m bid by the Scandinavian milk group Arla Foods, Europe’s largest dairy group.

The Wiseman brothers, Robert and Alan, have turned their East Kilbride company into Scotland’s largest milk producer. "We’ve covered nearly 90% of the UK and we’re going for 100%," Robert Wiseman said.

But before it could make a counter-bid for Express, the company says there would be barriers to overcome. Express suffers from over-capacity, reduced margins, 200m of debts and a doorstep market falling by 10% a year.

In 2000, Wiseman Dairies was involved in a bidding war with Dairy Crest, which won the battle to buy the liquid milk and cheese business of Unigate, but this experience has not put Wiseman off. "It was thoroughly enjoyable and involved us in a lot of work. It was a great move to go for Unigate but Dairy Crest won, they were bigger than we were."

The UK liquid milk market is dominated by four groups, all under increasing pressure as they compete for vital supermarket contracts. But Wiseman is confident his strategy will pay off.

"Our strategy still works, we are the only company building new dairies. In the future, the industry will have to consolidate and we’re in the right position to go for it. We now have the right people in place."

Analysts believe that despite the company’s counter-offer for Unigate two years ago, it would be unlikely to mount a counter-bid for Express, because its expansion focuses on developing its own facilities.

Keane said: "We are not ruling anything out. We have the resources to participate in further acquisitions."

Wiseman Dairies will benefit either way from the Express sale, according to Michael Landymore, an analyst with Investec Henderson Crosthwaite. "If Arla take on Express, they’ll have so many management issues and problems to deal with, it will give Wiseman a chance to strengthen its market share."

On Friday, Robert Wiseman Dairies’ share price closed at 113.5p. Express Dairies remained high at 26.5p, but below the 35p-a-share cash offer being prepared by Arla Foods.

Less than two years ago, Express shares stood at 95p, but reached a low of 13.5p. In November, it passed the interim dividend and announced underlying profits of 13.3m for the six months to September 30.

Arla is owned by a Scandinavian farmers’ co-operative. It is the product of the 2000 merger of Arla and MD Foods, but the group traces its roots back to the establishment of the steam dairy in Stockholm in 1869.