ICSA comment on TLT receivership

11th November, 2013

Reacting to the news that livestock exporter TLT International has gone into receivership, ICSA president Gabriel Gilmartin said that it reflects the risk-averse nature of the banking system at present. “The live export trade is vital to the cattle and sheep sectors here but the sector faces huge challenges given the difficulties in securing appropriate commitment in terms of long term financing from the banking sector.”

Mr Gilmartin has called on the receiver to provide immediate clarity on how many marts and how many farmers are exposed. “The receiver must then outline how he proposes to secure full payment of all monies owed to farmers and marts.” Mr Gilmartin also said that the receiver and the bank involved must realise the importance of getting a satisfactory resolution in a way which does not undermine confidence in the trade.

He added that farmers and marts could not be expected to solve the shortcomings in the banking system or to handle the inherent risks involved. “The live export trade can be viable. However, live exporters are very vulnerable to any interruption of cash flow, which is an occasional reality of the business. In general, the solution must involve facilitating live exporters to continue in business and trade their way out of any temporary problems. Anything that undermines confidence and trust can turn a small problem into a big one overnight.”

Mr Gilmartin also expressed concern that in the case of TLT, the receiver will, in following the normal rules for receivership, put marts and farmers at the end of the queue. “There is reason to be anxious that the process will result in losses for some marts and possibly for some individual farmers who do not deal through the marts. The Government will need to exert pressure on the Irish banks to ensure that they support the mart and farming sectors who have an exposure.”

ICSA suckler chairman Dermot Kelleher advised farmers with stock to sell to hold their nerve. “All the early signs are that the impact on the weanling trade has been minimal with a good trade reported in marts at the weekend notwithstanding the news. The realities of supply and demand for weanlings remain much the same, both in terms of the domestic trade and live exports.

Other live exporters are active at the ringside. However, demand for stock for the Italian market has been weaker throughout 2013 and is back some 30% compared with 2012. At the end of October, year to date exports to Italy stood at less than 25,000 head.”