FDBusiness.com

Strong returns from international dairy markets and increasing on farm milk production, which created higher processing throughputs, helped Dairygold, the Irish farmers co-operative, to generate an operating profit on its core activities of Eur22.6 million for 2011, a 19.6% increase on the 2010 figure. Dairygold’s optimisation of its product and customer mix, together with improved operating efficiencies helped to increase profitability.

Turnover in 2011 was Eur757.8 million – up 9.3% on the previous year. The increase was generated across the main business activities of dairy processing and agri trading.

Dairygold’s dairy processing division (Dairygold Food Ingredients) had a strong year. Dairygold has well invested and highly efficient processing facilities which benefited from investments of over Eur60 million in the last four years. The investment included an upgrade at Dairygold’s ingredients facility at Mitchelstown to facilitate the increased supply requirements of the expanded Danone infant formula facility at Macroom.

Dairygold chief executive Jim Woulfe comments: “In the dairy operations, improved markets and the higher throughput increased turnover and this along with continuous improvement in efficiencies helped to deliver improved results. The agri operations benefitted from increased on-farm activity which helped the performance of the fertiliser and feed businesses.”

In 2011 Dairygold invested a total of Eur33.9 million in the business – Eur15.4 million in capital expenditure and Eur18.5 million in acquiring a portfolio of strategic property assets from Reox Holdings. The co-op’s net debt was reduced by Eur13.6 million before the investment of Eur18.5 million on the acquisition of a portfolio of assets from Reox Holdings, which increased the net debt by Eur4.9 million to Eur67.2m at the year end.