A Miller’s Tale


History of a Northern Irish Compounder: Part Two By Richard Scott


The first part of this history of the Scotts of Omagh feed business covered up to and just beyond its centenary in 1950. The story now continues with developments in the post-war period.


The company board was fully aware of the opportunities created by the UK’s revolutionary 1947 Agriculture Act, which sought to reduce the United Kingdom’s dangerous reliance on imported food. Memories lingered of the wartime years, when German submarines had all but succeeded, by sinking merchant ships in large numbers, in starving the population of our island nation into submission. In 1948, after much research and debate, the board agreed on a


fundamental change of direction in the business of the Omagh mill. Bank loans were negotiated in 1950 for the plant’s reconstruction, to meet the immediate and future need for increased production of compound animal feeds. The oatmeal business was wound down and closed in 1960, two years before my father died at the age of 67. It is perhaps interesting to recall that the directors’ ambition in


1950 had been that the mill should have a plant that was capable of producing 200 tons of meals and pelleted feeds in a forty-five hour week. During the following decade, it became apparent that this target was unduly conservative. The gradual expansion of the trade, and the productive capacity, while keeping customers’ needs supplied, presented a continuing challenge for the board and the workforce alike for the remainder of the twentieth century. Taking stock in 1960 of the family enterprise to which I was now committed, matters might have been summarised as follows: The market: in Tyrone and Fermanagh, there were 323,500 cattle, 196,000 sheep, 205,000 pigs and 3,250,000 poultry. There were 52,000 acres of oats and 3,440 acres of barley. For historical reasons, farms in the middle and west of Ulster were of small acreage. High rainfall and small fields limited the growing of cereals, though grass grew in abundance. Livestock production was intensive; it was also set to expand. All of these factors indicated that there was a developing market for locally-produced compound feeds. The mill company: output in the previous year had been 15,079 tons, compared with 7,000 tons in 1951, with a presumption that it had been almost non-existent in 1945. Net profit, after tax and depreciation, was £0.51 per ton. The net worth shown on the balance sheet was £111,490. This did not include the site value of the premises, which consisted of five acres within half a mile of the centre of a growing county town. The buildings: these were antiquated but sufficient in size to receive modern machinery for the enhanced productivity that would be essential. There was sufficient surrounding space to allow for any necessary new building.


PAGE 24 JANUARY/FEBRUARY 2021 FEED COMPOUNDER In summary, this was a tiny company when compared with the


regional and national compounders based in Belfast and Lisburn. It was also a company that was solvent, though as yet barely profitable. The major asset was its people - competent management and staff, supportive shareholders and a family board of directors who had ambitions to grow the business from its very modest base. Within its hinterland, on average seventy miles distant from the


major competition, there was an opportunity to establish a competitive edge. The company also had an independent supply line through the port of Londonderry, only thirty miles away, where the long-established McCorkell family and company of grain importers had always been supportive.


Bank and Government Support Critically, in 1960 a full exchange of information took place at a meeting in Dublin of the company’s board with the general manager of Provincial Bank of Ireland, later merged into Allied Irish Bank. The conversation indicated that we had their trust. This was later confirmed by the fact that the company’s plans for major investment and borrowing were undertaken without the underlying assets having to be pledged. Our family’s association with the same bank dated back to 1837;


more important than this long history was the strong cash flow, during the 1950 decade, which gave the bank confidence that any sums the company borrowed would be repaid, in full and on time, in accordance with an agreed schedule. They also liked our market assessment and plans for expansion. The Bank’s only stipulation was that the company should raise further funding from its shareholders, in recognition of the relatively enormous advances that the Bank had sanctioned. This resulted in £10,000 of 5½% Redeemable Unsecured Notes being subscribed by existing shareholders. These were undated, which gave the company’s directors the ability to redeem them at a time that they found suitable. As a final boost to the directors’ confidence, and to the great


benefit of cash flow, the Aid to Industry Act 1952 provided government grants for manufacturing businesses of one-third of all expenditure on fixed plant and buildings. These grants remained in force for about forty years and provided a substantial incentive for us to continuously update the production process. The 1950s and 1960s became the most active decades in the


company’s history thus far. The ambitious starting point was the silo, constructed in 1951, which provided 11 grain bins of thirty tons each. The next part of the plant to attract investment was the grinding and mixing process, with the over-riding aim of total elimination of the handling of grain and ground materials in sacks. This was achieved in


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