Tipperary Co-op expects to return to profit in 2025 after a challenging period

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

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.
Arrabawn and Tipperary announced earlier this month they had entered preliminary exclusive discussions regarding possible integration of their operations, including potential amalgamation.

The Tipperary 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.

CHALLENGES
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.

POSITIVE IMPACT
“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.”