Making grass greener has been the core business of Germinal for the past 200 years. And if that seems a very agricultural pursuit, it is, but one whose roots these days run back to the laboratory.
In a world where farmers are under ever increasing pressure to reduce emissions while increasing yields, the family-owned business is at the cutting edge of science. The group’s range of grass seed helps reduce everything from ammonia emissions in cattle to the need for artificial fertilisers.
These seeds are the product of research at the group’s bases in Aberystwyth in Wales and Wiltshire in England, where one in five of its staff are now employed. It also has a research unit in New Zealand.
It’s all a far cry from its origins in the latter years of the Industrial Revolution.
RM Block
Founded by Samuel McCausland, whose portrait looks down at his great-great-great grandson and current chairman William Gilbert as we talk, McCauslands, as it then was, started as a grocery import/export business in Belfast Port.
Ever open to new business opportunities, he and fellow Belfast merchants noticed a burgeoning industry in southwest Scotland producing grass seed. They tried to replicate the business in Ireland but, in Gilbert’s words, they failed miserably.
Chastened, they travelled to Scotland, ostensibly to negotiate supplies with one of the companies over there.
“What they actually did was two of them went into the office for a meeting with the business owner and the other four or five of them went into his warehouse, crawled all over the machinery, worked out exactly how the timing worked, how it was set up et cetera. And then they essentially stole the trade.
“So, it moved to Northern Ireland. From that period, the mid-19th century to just around the time of the second World War, Northern Ireland was the biggest ryegrass seed producer in the world, believe it or not”, exporting seed across Europe as well as to Africa, the Americas and even Australia and New Zealand.
But as the demand for quality grew in the aftermath of the second World War, the shortcomings of the Irish climate made seed production less viable and seed growing moved to the Netherlands and then Denmark in Europe, the Pacific Northwest of the United States, and New Zealand.
Ryegrass seed may no longer be grown in Ireland but McCauslands wasn’t giving up on grass and, following a series of mergers and takeovers, it moved instead into wholesaling as a seed merchant. It also expanded into Britain.
Gilbert recalls it as a fairly turbulent time in the industry.
“My father ran the business, now known as Germinal, during that period – from the late 1970s all the way through to the 1990s – that period when it was extremely tough to survive, let alone make money. There were 30-odd companies doing that back then in the 1980s and 1990s and over 20 of them went to the wall. I can’t imagine the difficulties he went through and how hard it must have been for him.”
The early part of that period also saw Germinal, in Gilbert’s words, driven out of Belfast in 1975 by the Troubles, with the business relocating to its site in Banbridge, Co Down.
When the dust settled, Germinal was left as one of the three big seed wholesalers in Europe alongside competitors from Denmark and the Netherlands, and the biggest player in the British and Irish markets.
More importantly, it had moved into seed development.
Having worked with Aberystwyth University on a research project in the 1980s, Germinal tendered for a commercial partnership with the university’s Welsh Plant Breeding Station when it was targeted by the Thatcher government’s privatisation drive at the end of that decade.
“That is the reason we’re still here,” said Gilbert, “because, as I said, so many people were doing the same thing as us, it was me-too products. Nearly everyone had access to all the varieties.
“What my father realised at the time was that there was an element of control of the product needed. We can’t be messing around with me-too products with way too thin margins; you need to have some control of what we’re doing.”
It was a brave call. Aberystwyth had little recent track record in developing significant new plant varieties, especially compared with a rival research centre in Cambridge. It took 12 years of investment before Germinal saw some return, with a commercially viable seed variety.
Brexit has added significant cost to our bottom line; you’re talking hundreds of thousands of pounds in seed testing and paperwork costs. It’s big money
— William Gilbert
That lead-in time was one of the reasons Germinal has stayed in private hands.
“You wouldn’t want to be reporting your results to the stock market on a regular basis,” Gilbert says, because the seed industry can be a very cyclical one and developing a new product takes between 12 and 15 years.
“We’re making the first crosses [crossbreeding] now. I’m 49. So there will be product coming into the market when I’m in my mid-60s. So we are literally making decisions now which are going to affect things after I may no longer be in the business.”
The bottom line for Germinal is producing products that help farmers produce food more efficiently.
“We are expecting our breeding team to bring an improvement every year to the table,” Gilbert says. “A new product could deliver a few percentage points’ higher yield, it could be higher quality, or of greater consistency, all things that will benefit the farmers and, at the end of the day, the consumer.”
Agriculture accounts for the bulk of Germinal’s business – around 80 per cent – with dairy its big market sector within that, not least because the benefits become clear to the farmer more quickly via milk yields, whereas beef and sheep farmers have a longer lead-in time to see results.
Dairy is also among the most profitable segments in farming, which allows more scope for investment in upgrading the raw material – grass. Farmers traditionally reseed a fraction of their land each year or two, profits permitting.
Climate change
Climate change has become an increasing focus for seed development over the past decade as the Government struggles to meet targets it has agreed to in Europe and farmers fight to avoid limits on herd size and come under pressure over the EU nitrates directive.
Germinal has developed a range of what it calls Aber high sugar grasses – the Aber being a nod to Aberystwyth – which reduce ammonia and nitrous oxide emissions in cattle.
“It’s not so much methane,” says Gilbert. “Methane is the buzz word people tend to pick up on but the real benefits are reduction in ammonia and nitrous oxide emissions which are nasty at the same time.” As a bonus, these high-sugar grasses also increase the protein livestock can take from the grass.
More recently, the company has developed seed mixes that include specially bred hardy types of clover which has the advantage of capturing more nitrogen than it needs to thrive. The surplus nitrogen can be tapped by neighbouring grasses.
That offers farmers a twin benefit. First, they can cut back on fertiliser and slurry, which has become the focus of EU ire over Ireland’s failure to meet targets under the nitrates directive. And, as fertiliser is a significant input cost on farms, any reduction in its use delivers an economic benefit to the farmers.
A reduced requirement for nitrogen fertilisers offers governments the added benefit of lower greenhouse gas emissions related to their manufacture.
[ Cutting the entire cattle herd to reduce emissions makes no economic senseOpens in new window ]
Does the science envisage a time when farmers no longer need to be using any nitrogen-based fertiliser?
“That’s the aim and I don’t see why not,” Gilbert says. “It may just be that if you use clover properly and manage your fields and your land efficiently, that you might not get quite the same level of yield as if you’re throwing 350 kilos of nitrogen per hectare per year but you will get a perfectly acceptable yield that will work more efficiently for your farm and your system and, as importantly, be better for the environment and more sustainable in the long term.”
Edicts from Brussels are not the only factor influencing the development of products that mitigate climate risk. Germinal’s parent, Openfolde, has a 50 per cent stake in New Zealand seed developer and merchant Cates. Livestock stocking rates down there are higher than in Ireland and the pressure to cut emissions strong.
Germinal is currently developing a new clover variety that is more efficient in how it uses phosphorus, again reducing the need for additional supplements on farms.
Horse and Jockey
Much of the seed mixing for its different products takes place in Horse and Jockey in Co Tipperary where Germinal bought a 10-hectare site in the early 1980s from Roadstone.
“Obviously, historically, we had traded in Ireland, but partition came along and Northern Ireland’s business was probably not as popular as it could have been,” Gilbert notes. But that didn’t stop the company acquiring the site to centralise its mixing and packaging, and target sales in the Republic.
“Germinal Ireland’s been probably our singular biggest success, certainly over the last 30 or 40 years. We have literally gone from zero in Ireland in the late 1970s/early 1980s, to market leader.”
Brexit, when it came, was a headache, with Gilbert confessing to feeling powerless as debate raged over the nature of post-Brexit cross-Border trading arrangements. In the event what it has done is increase costs.
“It has added significant cost to our bottom line; you’re talking hundreds of thousands of pounds in seed testing and paperwork costs,” he says. “Nothing’s changed. We’re producing the same seed in the UK, we’re exporting it for use in Ireland. We were sending thousands of tonnes of seeds across and each one of the seed lots attracts a testing charge. It’s big money.”
But despite those challenges, Germinal remains a profitable business. Accounts for Openfolde – the parent holding company – show a business consistently delivering sales in the £29 million to £30 million range (€32.5 million to €34 million) with profits before tax above €3 million. Last year, the figure was £3.34 million.
Going forward, the focus is on delivering consistent solid profit that allows for reinvestment into the business in what is a mature and competitive market subject to cyclical swings generally determined by weather.
“We’re not knocking out a washing machine, we are selling something which is a long-term investment for their farm. And also for the retailers supplying it, they’re staking their reputation on our product.”
The company has returned its headquarters to an economically resurgent Belfast since 2021.
And with increasingly diverse interests, it was decided shortly after to create a new brand for the holding company. Its name, Openfolde, Gilbert says, combines the company’s focus on being authentic and receptive in its relations with farm customers and folde, the Old English word for earth, land or ground.
While agriculture accounts for the majority of the business, Germinal has diversified into other areas, which now account for around 20 per cent of its turnover.
These include everything from sports pitches – with a Premier League club in England among its customers, alongside universities, schools and local authorities – to golf courses, and from landscaping seed mixtures to domestic lawn seed. Most recently, it has started selling bird-feed mixtures.
It also has an ecommerce operation in Britain, property interests, a share in a commercial-waste business and other financial investments.
Gilbert believes any significant growth is more likely to come via acquisition but even there, competition from other established players in the industry is likely to be intense. New markets might be one option. As it is, while the company has operations in Ireland, Britain and New Zealand, it works with independent partners in 25 to 30 different countries worldwide.
What is unlikely to change is ownership of the business. Gilbert is the sixth generation of the family to run it. His father and predecessor, John Gilbert, is the group’s chairman and another family member, Samuel McCausland, is vice-chairman.
“We’ve been around for 200 years and I think a part of the reason for that is we’ve been prudent but at the same time, we do think generationally,” he says. “That cliche of the Patek Philippe watch advert, that you never really own it, you’re really just looking after it for the next generation. That’s how we as a business have tended to see this business.”
CV
Name: William Gilbert.
Age: 49.
Position: Managing director, Openfolde.
Family: Married to Caroline, who he has known since school; they have four sons – Tom, Leo, Rory and Kim.
Hobbies: A lifelong rower who competed for Ireland at junior, under-18 and under-23 levels, he says the sport remains a very big part of his life. He recently competed at the World Masters in Banyoles, north of Girona in Spain.
Something you might expect: He hopes one of his children see the business as a good career opportunity, making them the seventh generation of the family to run it in a line unbroken since its foundation.
Something that might surprise: While the company’s focus is on agriculture, it also supplies turf to top football teams, including a Premier League side in England.
