Moves to bring together two of Ulster’s longest-standing dairy co-operatives are believed to be under way, possibly leading to a merger of Ballyrashane and Town of Monaghan Co-op societies.

The Irish Farmers Journal understands that separate meetings of the boards of both co-ops took place on Wednesday and that they endorsed a plan that could lead to a full merger of the businesses.

The cash-rich Town of Monaghan Co-op, which reported net current assets of more than €34m in its balance sheet at the end of 2013, has been considering the best options for investment in development of its business.

It declared after-tax profits of over €8m on sales turnover of around €220m for 2013 and is a significant player in Northern Ireland, having taken over the milk pool of Strathroy Milk Marketing Ltd not long after deregulation of the market in NI and then purchasing Leckpatrick dairy at Artigarvan from Kerry plc in the early years of the new millennium.

The Monaghan Co-op buys around 20% of the milk produced in NI and obtains more than 80% of its milk supplies north of the border.

Turnover at north Antrim’s Ballyrashane Co-op was around £80m in 2013, with profit of £227,000.

The North Coast Co-op has made significant investments in its business over the past few years, having installed a new butter manufacturing facility last year and earlier setting up the anaerobic digester that added to the green credentials of the operation. That was before the bold move to purchase milk directly from its members just over two years ago.

In making that move, Ballyrashane committed to pay a bonus to its existing and new members, based on previous levels of milk supply. In doing so, it has built up a milk pool of over 100 million litres from 109 suppliers.

Ballyrashane has blue-chip customers, such as Marks & Spencer. Its butter plant is described as one of the most modern in the country.

Both co-ops employ around 150 people. Their decision to explore a merger could spark further similar moves. It follows the decision last year by Fivemiletown Co-op to close down its processing and sell milk exclusively to Glanbia Ingredients Ireland Ltd, in a five-year deal.

Former Bord na Móna chief executive Gabriel D’Arcy was recently appointed as chief executive at Town of Monaghan.