Aurivo CEO Aaron Forde talks to Joe Dermody
|2018||2017||Year on year % change|
|Group operating profit (before exceptionals)||€3.0m||€3.9m|||
|Investment in plant and machinery||€22.0m||€3.9m||464|
|Consumer Foods turnover||€98.8m||€99.1m||-|
|Dairy Ingredients turnover||€153.4m||€143.5m||7|
Aurivo is gearing up for future expanded output from its suppliers, while allowing for potentially a slow pace in global demand for the remainder of 2019.
While reporting operating profits of €3m for 2018, down 23% from €3.9m in 2018, the Connacht-based dairy co-op also this year invested €22m in a new five-tonne drier to boost its processing capacity at its Ballaghaderreen plant.
This is part of its ambitious €48m five-year investment programme to ensure Aurivo is well-positioned to take advantage of future market opportunities.
The €0.9m fall in profits was due to Brexit-related market impacts and the co-op's decision to support the milk price to its suppliers, by around 0.5cpl to 1cpl at various periods during 2018.
“We take the view that we had a solid performance in a volatile year,” said Aaron Force, CEO of Aurivo. “Our milk supply was up by almost 8% to 439 million litres, but it was a year with challenges in global markets and extreme weather conditions.”
Aurivo grew its Dairy Ingredients business business to revenues of €153.4m during 2018, up from €143.5m in 2017. Of the 439 million litres of milk processed in total by Aurivo in 2018, 327 million litres went into dairy ingredients as manufacturing milk processed into milk powders and butter.
The Consumer Foods business processed 112 million litres of milk and with a portfolio of sales across milk, butter and sports nutrition, turnover remained steady for this sector at €98.8m (2017: €99.1m). The impacts of extremely volatile butter prices were offset by continued growth in customer brand milk.
Aurivo's marts business were closed on two occasions during 2018, once due to Storm Emma and once due to an accident involving a customer and a bull. Nonetheless, its Agri Business division reported a turnover of €120.7m, an 18% increase on 2017 (2017: €102.1m).
Homeland store sales were up 15% on the previous year and fertiliser tonnage up 16%. To support its farmers through the difficult fodder crisis of 2018, Aurivo sourced fodder from other EU member states.
“Despite the market challenges surrounding Brexit, we believe we have the right to continue delivering a stable business for our members,” said Aaron Forde.
“The uncertainties and implications of Brexit pose significant challenges to the sector. Within that environment, our focus as a diverse co-operative will continue to be on growing a sustainable business that will not only create value for our members but will ensure a certain future for our farms, and our communities for generations to come.
“The bedrock of Aurivo’s value generation is grounded on a philosophy of operational excellence and continuous improvement that takes precedence in all operations and business functions throughout the co-op.
“Our €48m planned investment programme aims to ensure we become a sustainable partner of choice for our customers, both nationally and internationally, with the facilities and capabilities to produce the best possible products.”