29 Sept 2022

Tipperary farming: Arrabawn showed 'great resilience' given challenges of 2020

Tipperary farming: Arrabawn showed 'great resilience' given challenges of 2020

Arrabawn chairman Edward Carr: 'Given the unprecedented challenges of 2020, Arrabawn showed great resilience'

Arrabawn achieved record revenues and grew its profit in 2020 despite a year of significant challenge, its annual report reveals.

The Co-Op’s agm this week - held online for the second year running - revealed that turnover was up by €12.8m to €278.4m, with EBITDA (earnings before interest, taxes, depreciation, and amortization) climbing to €10.4m, an increase of €2.9m (37%) on 2019.

Average milk price paid was 34.37cpl, which was an increase of 0.61cpl over 2019, with milk supply reaching 437 million litres – an increase of 6% on 2019. 

Operating profit for the year was €2.68m. This was before an exceptional charge of €1.1m due to a restructure and product recall at its liquid milk facility. Net debt was also reduced by €3m.

Critically for members, 2020 also saw the successful commissioning of Arrabawn’s new €30m casein and effluent plant at Nenagh. This was a significant achievement, with commissioning work having to be partly done remotely with international suppliers. The investment ensures that Arrabawn has sufficient capacity to deal with milk pool growth for the coming years. 

Ingredients was a big performer again in 2020, with tonnages particularly strong in butter, casein, caseinate and whey. Agri-trading was up by 8%, with feed, agri-hardware and general hardware the biggest growth areas.

Said CEO Conor Ryan: “We will look back on the past 12 months as a year of and very significant challenge. COVID-19 tested the resolve of everyone, but the agri-sector stood firm again in the face of this crisis. Our staff and suppliers showed fantastic resilience in working through this very difficult year and we are, indeed, grateful to all.

“In terms of our individual business units, our ingredients division performed well, with milk price holding up better than expected despite the negative sentiment due to COVID. We are particularly proud of the completion of our new casein and effluent plants, which were commissioned ahead of schedule despite the challenges presented by the pandemic.

“Our liquid milk division had a challenging year. We responded to this by conducting a review of operations and implementing a related a restrucutring programme and improvements. Theses measures are aimed at putting the business on a more solid footing in what is an increasingly challenging liquid milk market.

“Our agri division, meanwhile, had a very strong year and the fact that all our stores remained opened throughout the pandemic again reflects the commitment and dedication of our staff, for which we are extremely grateful. Staying opened enabled us to not alone provide for the needs of our suppliers but the wider public during a difficult year and resulted in a significant growth new customers and trade.  The fact also that we had no covid outbreak of significance across our entire employee base again reflects the professionalism and adaptability of our staff.”

Said Arrabawn Chairman Edward Carr: “Given the unprecedented challenges of 2020, Arrabawn showed great resilience. It was by and large a year for  working through challenges and while there is still some distance to go, there is light ahead and we must continue to stay focused as we work through residual issues.

“The two key takes for our suppliers are that, despite fears of a contraction, milk price overall was up on 2019 and that we have now completed and commissioned our new plant, giving us the capacity to cater for the anticipated growth in our milk pool in the years ahead.”

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