An Alliance that fits
MFA Incorporated and Tennessee Farmers Cooperative form animal health company
In April, MFA Incorporated and Tennessee Farmers Cooperative launched Alliance Animal Care LLC, a joint venture that brings increased buying power and specialized logistics to both entities.
With operations expected to begin in June, the new company will procure animal health products from major manufacturers and suppliers and deliver them to MFA and TFC retail and wholesale locations through a just-in-time logistics network. Alliance plans to serve other cooperatives and dealers nationwide, which will help achieve added volume.
“In the animal health market, there are opportunities to take part in buying programs that deliver savings to our customers,” said Brian Griffith, senior vice president of corporate operations at MFA Incorporated.
“Our previous supplier had become undependable. The situation brought an opportunity. Both TFC and MFA are committed to our livestock customers, and given our proximity and like-minded businesses, a joint venture made sense. Together TFC and MFA provide enough product volume to take part in those buying programs and discounts from manufacturers and suppliers.”
Each cooperative owns a 50-percent stake in Alliance Animal Care, which was formed as a limited liability company in Tennessee and is guided by a board of directors comprised of two representatives from both MFA and TFC. In its first year of operations, the company expects to sell more than $20 million worth of animal health products.
Alliance’s business operations are based in LaVergne, Tenn., where a staff of six, all of whom have strong agricultural backgrounds, will handle procurement and customer service responsibilities. Dr. Kevin Cox, a veterinarian who had been serving as manager of TFC’s Animal Health Department, has been named the chief operating officer of Alliance. He said the animal health knowledge base and general culture at MFA and
TFC are a good fit for the venture.
“One of the reasons we formed Alliance was that both MFA and TFC see advantages in the cooperative model,” said Cox. “While the new venture is an LLC, it operates to accommodate the needs of a regional cooperative. We will work with MFA and TFC Animal Health Departments to deliver products that fit programs cooperatives have developed for their customers and members. We understand the needs of cooperatives and the importance of animal health products, including prompt delivery to fit the schedule of livestock producers.”
Alliance is employing Bluegrass Supply Chain Services, an independent logistics company, to manage product shipment from Bowling Green, Ky. With warehouse facilities, order processing technology and expertise in shipping logistics, Bluegrass brings a level of efficiency to the operation that would have been difficult for Alliance to achieve on its own, said Cox.
For animal health customers of MFA and TFC, the transition to Alliance should be seamless, product choice remain unchanged, and service enhanced, said Joe Huffine, manager of TFC’s Livestock Division and an Alliance board member. He said the joint venture partners could have sourced animal health products from third-party suppliers, but in the long run, Alliance will bring many benefits to MFA, TFC, and their customers as well as the other cooperatives and dealers that the new company will serve.
“Since Alliance is core in animal health, we will be very focused in the market in terms of when to buy and in making recommendations to customers,” said Huffine. “With Alliance, there will be buying power substantial enough to demand attention in the marketplace from the largest and most reputable companies. And most importantly, we will be adequately financed to take advantage of vendor programs, and customers can be confident that we will have product available when their needs occur. Those advantages will make Alliance extremely competitive.”
Cox said he believes the formation of Alliance is an “exciting” new chapter in the animal health business for both MFA and TFC.
“We get to be part of a solution to a challenge, and build that solution from the ground up,” said Cox. “It’s custom-made animal health, designed to fit our systems and the needs of our customers.”
For more information, visit http://www.allianceanimalcare.com/main/default.aspx
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