OPERATING PROFIT at Cavan-based co-operative Lakeland Dairies soared by 52 per cent to €6.85 million last year, as the co-op benefited from strong global dairy markets in 2011.
Turnover increased by 18 per cent to €472 million, mainly reflecting higher milk prices, although increased volumes also contributed.
Lakeland chief executive Michael Hanley said the jump in operating profit reflected the development of more added-value milk products, while the business also benefited from increased efficiencies at its new operating plant in Baileborough, Co Cavan.
The €20 million plant, officially opened in October 2010, is the largest non-whey drying plant in Europe.
About 2,000 farmers from the northern half of Ireland supply milk to Lakeland Dairies, which is the second-largest co-op in the State.
Roughly 85 per cent of the milk it receives is processed into powder form, which is then exported across Europe and Africa.
The remainder goes into Lakeland’s food service business, which produces products such as as UHT milk, pre-packed butters, ice cream and flavoured milk for the airline, hotel and catering trade.
According to Mr Hanley, the food service division is the more value-added part of the business.
While about 15 per cent of Lakeland’s milk goes into the food service business, the sector represents about 30 per cent of revenues.
Mr Hanley added that Lakeland exported 170 branded food service and ingredients products to about 70 countries worldwide and that the co-op was currently developing a product for a major Chinese client.
Lakeland’s agri-trading division, which sells feed to farmers and independent stores and accounts for about 9 per cent of revenue, experienced a 13 per cent rise in turnover last year, boosted by the generally positive dairy market conditions.
According to Mr Hanley, the co-op expects to increase milk intake by between 35 and 55 per cent, following the abolition of milk quotas in 2015, which will allow farmers to produce an unlimited amount of milk for the first time since 1984.
Lakeland’s recently opened Baileborough plant means the co-op will have the ability to handle a 50 per cent increase in milk supply, with relatively small investment, Mr Hanley said, adding that its site in Castleblayney, Co Monaghan also held potential for development.
