Lakeland Dairies, the cross-Border co-operative owned by about 2,000 farmers, has broken the €500 million sales barrier as it prepares to ramp up production ahead of the ending of EU milk quotas next April.

Cavan-headquartered Lakeland, which draws its members from the Border region, including about 400 from the North, recorded a 15 per cent boost in sales last year to more than €545 million. Its pretax profits rose by almost a third to just over €10 million.

Much of the boost came from its food ingredients division, which accounts for more than half its business. It also improved sales in its food service division, which supplies professional kitchens, and its smaller agri- trading division, which supplies members with animal feed.

Lakeland supplies own-brand dairy products to supermarket chains, such as ice cream to Supervalu and all-white milk for Lidl in Ireland and Britain.

Its latest products include a UHT “milk stick”, which is used by restaurant chains, including McDonalds, as well as Ryanair.

Chief executive Michael Hanley said the main priority for the business was getting ready for the ending of European milk quotas in April 2015, when the Irish dairy sector is expected to increase production.

“We have teams on the ground helping farmers get ready,” he said. Lakeland expects to process 30-45 per cent extra milk once quotas end.

“We have customers for all our new milk,” he said. Lakeland is targeting growth in China, the Middle East and Africa.

Mr Hanley expects Lakeland to invest about €15 million this year. It has already committed to investing £9 million in a warehouse in Northern Ireland.

“We are evaluating further investments that we can make from within our own resources. But we have also spoken to the banks, and we will have access to whatever [funds] we need to develop the business.”