Arrabawn to pay top milk price
The Tipperary-based co-op has paid €15.7m over the past five years to fund operations. It predicts it will continue to produce more value-added products this year, and give its suppliers one of the most competitive milk prices in the country. Arrabawn’s average milk price for 2014 was 38.27c/ltr. It processed 310m litres of milk in 2014, an 8% increase on the previous year.
Arrabawn CEO Conor Ryan said: “Five years ago, we acknowledged the end of quota in 2015 and put an investment programme in place to ensure we had capacity for suppliers and a plant that delivered efficiencies and a more competitive milk price.
“Not only that, we have also focused on developing products and reducing dependency on basic commodities. This was all aimed at delivering an improved return for our farmers and it is now coming to fruition, with space for further improvements still ahead.”
The current trading year he said would see the company improve again. Operating margins in 2014 were at 2.08%, up from 1.26% in 2013. Operating profits have tripled since 2012. Profit before tax last year doubled on 2013, from €1.8m to €3.6m.
Other key figures in the co-op’s 2014 results include: Gross profit up by €2.5m (5%) to €48.5m; earnings before interest, taxes, depreciation, and amortisation at €8m was up €2m on 2013; net debt is at €9.25m, down €880,000; retained profit was €3m, up from €1.4m; total capital and reserves up from €37.5m to €41.9m.
“The results show that the capital expenditure programme put in place over recent years has started to deliver real benefits. Some key strategic decisions have been made, which also include the product development side. This is delivering handsome rewards,” said chairman Sean Monahan.
The Tipperary co-op has also fought hard to hold onto its milk suppliers in the past year, working hard to resist any risk of its members defecting to neighbours Dairygold and Glanbia.
With the post-quota opportunities set to open up competition for milk supply between co-ops, Arrabawn has told suppliers it will allow anyone with a superlevy liability to spread half of the fine over the next 12 months. It has also promised to remove the charge for milk collection from April 1 this year.
It will also operate a bonus scheme for manufacturing milk supplies in December, January and February. It also plans to realign its liquid milk contracts, and to introduce a bonus for new low-cell count milk.
