Bord na Móna’s Horticulture business has endured a difficult period over the recent past. Poor weather in Ireland and the UK during spring and summer 2008 adversely impacted on sales. Also, during 2008, a weaker Sterling resulted in significant foreign exchange losses.

 

As a result, it was decided to restructure operations by closing the majority of the Cúil na Móna processing and packaging facility in Co Laois and consolidating these operations into the Kilberry plant in Co Kildare with a €1.5m investment.

 

The focus now is on increasing competitiveness by reducing the cost base and maximising operational efficiencies. The Horticulture business is also seasonal in nature with most sales made during spring and early summer with dramatic fluctuations depending on weather conditions.

 

Horticulture also faces a significant challenge in relation to the UK government supported policy towards reducing the proportion of peat in growing media products by way of dilution with non-peat materials. In this regard B&Q, our largest customer, has a target to reduce the peat content of its growing media product range to 10%. Consistent with Bord na Móna’s “New Contract with Nature”, we are committed to the objective of replacing peat, where possible, with materials coming from renewable sources.

 

It is intended to streamline the supply chain by increasing the business’ focus on all aspects of its processes from the harvesting of peat through to the delivery of packaged and bulk products to customers.

 

 

 

Q. How did the restructuring of operations affect employee numbers?
The restructuring resulted in major improvements in productivity, efficiency and equipment utilisation. This has significantly reduced the manufacturing cost base and we are confident that this will lead to improved profitability in the coming year. As a result of scaling down operations at the Cúil na Móna facility in Co Laois, employee numbers fell by 31 all of whom availed of the Bord na Móna severance package. There were also a number of employees redeployed in other parts of the Bord na Móna business.

 

Q. What plans are in place to increase competitiveness?
It is intended to streamline the supply chain by increasing the business’ focus on all aspects of its processes from the harvesting of peat through to the delivery of packaged and bulk products to customers. Key aspects of the operation have already been restructured, with further opportunities for increased efficiency in areas such as transportation.

 

Q. How well can Horticulture respond to customer needs?
Historically, the Horticulture business has performed very well on certain aspects of customer service. In 2008, Bord na Móna was named as B&Q’s Supplier of the Year. There is a real opportunity to promote the top quality characteristics of our products, particularly in the retail channel. This can be achieved through maximising the category management of growing media products in retail customers’ outlets.

 

Q. Is the UK’s peat dilution agenda a significant threat?
The UK government-supported policy of diluting the proportion of peat in growing media products actually presents Bord na Móna with an opportunity consistent with its ‘New Contract with Nature’.

 

The Kilberry green waste composting facility processes various types of green waste including spent grain from the brewing industry. The resulting material is used as a peat substitute (diluent) in growing media products. Some of the green waste streams are also generated by the Resource Recovery business, representing a synergy of activities. Activities in this area will be expanded considerably over the next few years including exploring opportunities to acquire green waste streams in the UK.