The Dalmark Group is to close its grain marketing business, after its shareholders decided the operation no longer has the scale needed to compete in today’s market. Cefetra is to take on the stock and forward contracts.
Dalmark Grain, a subsidiary of JE & VM Dalton which trades as Dalton Seeds, was established in 1976 at Eye near Peterborough and has grown to handle between 200- 250,000 tonnes of grain each year. However the latest full year saw Dalmark Grain post a £359,000 loss on sales of £33 million, while the seed business saw a profit of £650,000 from revenues of £12m.
While the losses are related to the small 2016 harvest which reduced profitability across the grain trade, Dalmark shareholders concluded that the current structure of the UK grain industry no longer allows for a small, regional merchant to be profitable. Therefore they have agreed in principle that Cefetra will take on the stock and forward book, with this agreement due to be completed by the end of February.
Dalmark stresses that the grain business has no liquidity or solvency issues and is fully cross-guaranteed by JE & VM Dalton which has net assets in excess of £7 million. It also emphasises that it is business as usual for Dalton Seeds.
Cefetra, part of the £15 billion German multinational BayWa group, trades grain and feed materials from its headquarters in Glasgow. It acquired Wessex Grain in 2015, and now has grain offices in Somerset and Norfolk, and bought Premium Crops late last year.
“Given that our grain business has been in existence for over 40 years, naturally this is a sad day,” comments JE & VM Dalton managing director Peter Fox. “We are fully committed to UK agriculture and have done everything we can to avoid this day, but given the structure of the market place, have had to finally accept that our involvement in grain is no longer realistic.
“I am pleased that we have come to this agreement with Cefetra over our contractual position, and particularly pleased that they have offered a job interview with each and every member of Dalmark Grain staff affected.”