Lakeland Dairies, the Co Cavan-based co-operative, plans to invest some £10 million (€12.7 million) in its ingredients and food services business this year, its chief executive, Mr Dan Buckley, said yesterday.

The co-op reported a 16.3 per cent rise in pre-tax profits to £3.2 million (€4.1 million) for 1999, with turnover rising to £163 million (€207 million) from £136 million. Sales at Lakeland's dairy division generated £127 million (€161.26 million), with the remaining £36 million generated by its agri-trading business.

Mr Buckley said the co-op had invested £5.2 million (€6.6 million) last year and had capital reserves of £32 million (€40.63 million), with no borrowings. The investment this year would be used to create innovative and added-value products.

Mr Buckley attributed the coop's improved performance to the introduction of operating efficiencies, new value-added products and improved market conditions generally. Lakeland was also sourcing milk from outside its direct catchment area. While Lakeland pays 102p per gallon of milk to farmers, its competitors pay 97p to 101p. "We're able to do it because we have very strong operating efficiencies," Mr Buckley said.