Tipperary business hoping for strong return after difficult 2023

Tipperary Co-op expects to return to profit in 2025 after bracing a challenging period for the society, its interim CEO John Hunter said today on the publication of its annual report today.

Mr Hunter said that while 2023 was difficult for dairying nationally due to falling market returns and high input prices, this was compounded in Tipperary Co-op by exceptional operating challenges in its milk processing business during the year.

The annual report revealed that sales fell from the highs of €420m in 2022 to €304m in 2023.

Tipperary reported an operating loss of €6.8m for the year compared to a trading profit of $6.9m for the previous year.

The company’s French based cheese business, Tippagral, however, had a very strong year.

Mr Hunter said that operational challenges arose in Tipperary’s state of the art processing facilities which produces premium product offerings across butter, cheese, milk powders and concentrates. Unforeseen delays pushed the installation and commissioning of a ‘bag house filter’ at the Tipperary town plant into the busy 2023 processing period, resulting in significant unplanned downtime in the dryer plant, lower productivity, higher energy costs, and lower yields.

"This has been a turbulent and challenging time for Tipperary but we have responded by putting in place some difficult measures in Q3 of this year that are beginning to show results. These measures include a reduction in staff levels and labour rates in conjunction with the unions. We’ve also lowered overheads and external supply chain costs, and we’ve improved integration across milk procurement and production planning.

"We're already seeing the positive impact of this consolidation on our overall operational performance and production fundamentals, but it has not been easy for anyone. The commitment and buy-in of our team at the plant in Tipperary and our suppliers to turn this around has reaffirmed the strength of the co-op movement. Ultimately, our focus has been on implementing a programme that underpins the future for suppliers, customers and our team. That programme, I’m fully confident, will enable us turn the corner and return Tipperary to profit as early as next year."

The Interim CEO said that despite the challenges of the past year, there were some positives.

These include milk supply from Tipperary’s core supplier base exceeding 190 million litres in 2023, despite a rapid fall off in milk production due to difficult weather conditions and reduced milk prices.

This reaffirms the strong and sustainable milk supply from Tipperary farmers, Mr Hunter said.

Also, Tipperary Co-op’s French cheese cutting, packing, shredding and dicing business, Tippagral, had another bumper year of record growth.

Planned output continued to rise to fill the additional capacity and the business continued to deliver excellent returns on investment.

Tippagral continues to build its brand awareness, consolidate its market position and provide an ideal platform for growth for in Europe.

Mr Hunter added, "Our investment in creating a state-of-the-art plant brought unexpected challenges. But as we turn the corner, we can look forward to reaping the benefits of this transformed plant going forward and a broad product offering across butter, cheese, specalised powders and concentrates."