Tipperary's Arrabawn Co-op invests in its future with a record capital spend

Global interest in Tipperary co-op's products

Tipperary Star reporter

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Arrabawn Co-op invests in its future

Arrabawn Co-op in Nenagh: global interest in its products

Nenagh-based Arrabawn’s investment in the future was copper-fastened in 2019 with a record capital spend that sets it up to cater for growth from suppliers over the next 10 years.

The co-op’s 2019 accounts show that the amount of milk processed through its two processing plants – Nenagh and Kilconnell, County Galway - reached an all-time high of over 422m litres, an 8% increase on 2018.

However, with the record €50m programme of investment over the past three years by and large completed in 2019, Arrabawn is now well set for future growth ahead, according to CEO Conor Ryan.

The annual accounts show that capital expenditure was at its highest in the history of the organisation at a record €19.6m as the co-op committed the vast bulk of spend on its new casein and effluent plant during 2019.

It is expected that the organisation will return to more normalised capital expenditure levels on completion of the casein and effluent plants this year.

The investment, Mr Ryan said, was a vote of confidence in the future of the organisation and also resulted in 12 new hires being recruited.

Turnover for the year was at €265.5m in 2019, just down by 2% on the record turnover achieved in 2018.

The marginal turnover reduction was brought about in the main by reduced sales of feeds, which hit record levels in 2018 due to the exceptional weather conditions.

Operating profit in 2019 was at €1.04m, while EBIDTA was €7.5m.

Mr Ryan said that 2019 was a very important year for the organisation and will be seen as such in the years ahead when the work we did last year will have facilitated a significant increase in its milk processing capabilities. This significant capital investment programme was achieved on time and on budget.

“This investment substantially changes our business model from a manufacturing ingredients business as we now have the ability to process more of our milk into higher value-added products, which will deliver a better return for the organisation and its members and suppliers,” he said.

Mr Ryan said that the facility was now world-class, capable of the highest global customer expectations.

It will future proof Arrabawn’s operations and had already resulted in a lot of interest all over the globe in their range of products, he said.

Arrabawn chairman Edward Carr said that the record investment over the past year illustrated Arrabawn’s ambition on behalf of members.

The investment was also good news for suppliers as it will allow them to continue to expand over the coming years, he said.

“They be able to do that in the knowledge that we have the capacity to take increased volumes but also the ability to process these volumes into higher value-added products, which will deliver an additional return for our suppliers.

“Whereas before we would not have been able to meet these supply increases, we now have plenty of head room and look forward to capitalising on that in the future for the co-op and its members,” the chairman added.