Northwest-based co-op Aurivo officially opened a new milk powder facility in Ballaghaderreen, Co Roscommon, which will increase capacity by some 55%, producing over 60,000t of milk powders for international markets and 15,000t of butter annually.

The €26m investment is part of a wider €48m capital investment programme by Aurivo which will enable new product development and position the organisation to meet global demand and anticipated growth. Since the abolition of milk quotas, Aurivo has seen its milk supply increase by almost a third and has invested almost €80m in the business.

This dryer uses natural gas to dry the milk that is transported in bulk to the site. It is the first manufacturing facility in the country to use this energy source

ADVERTISEMENT

Aaron Forde, CEO of Aurivo, noted that the co-op had grown from a 200m litre business to a 480m litre business over a 15-year period. The Ballaghaderreen site had gone from having only one dryer to now having three. It will see production capacity at the site increase by 5t/h, bringing the site to 14t/h. This dryer will mainly manufacture enriched milk powders which have been a key element of Aurivo’s growth strategy over the years. The new facility, which has been producing products since April, will provide enough capacity for the next seven to eight years of milk supply growth, according to Forde. This dryer uses natural gas to dry the milk that is transported in bulk to the site. It is the first manufacturing facility in the country to use this energy source.

Aurivo chair Pat Duffy said the investment will “continue to return a leading milk price” to the co-op’s milk supplier base of 1,000 farmers across the region.

Aurivo collects milk from 14 counties in the west and northwest of Ireland and wants to grow its milk supply by 25% to 500m litres over the next three years.

At a time of uncertainty with issues such as Brexit looming in the background, this and other capital investment initiatives under Aurivo’s ambitious five-year strategy programme is a vote of confidence for growth potential within the Irish dairy sector

This project was the largest capital investment made in the history of Aurivo. Forde said the investment will ensure the co-op “becomes a sustainable partner of choice for its customers, both nationally and internationally, with facilities and capabilities to produce the best possible products”.

He said Aurivo will continue to invest in its business into the future.

Opening the dryer, Minister for Agriculture Michael Creed said: “At a time of uncertainty with issues such as Brexit looming in the background, this and other capital investment initiatives under Aurivo’s ambitious five-year strategy programme is a vote of confidence for growth potential within the Irish dairy sector.”

Last year, Aurivo made an operating profit of €3m on a turnover of €444m. Milk growth continues at the co-op where it processed 8% more milk in 2018 over the prior year.

The co-op had a net asset value on its balance sheet of €86m at year end last year.

Aurivo’s plan over the next three to four years is to process 500m litres of milk, achieve 2% profit margins and deliver a 45% uplift in shareholders’ funds.