Accounts for Strathroy Dairy Limited available from the UK Companies Registry only tell part of the story as the group also includes a private unlimited company registered in the Republic of Ireland, Strathroy Dairy (RoI).

Apart from keeping much of their business private, this allows the group to benefit from lower corporation tax on any profits made in the South.

The published accounts indicate profits of around Stg£200,000 on turnover above £44m in each of the past two years to 31 July (see table). The profits are after annual depreciation provision of around £0.7m. Over 130 people are employed.

Net assets at July 2013 are reported as £3.76m, but the balance sheet also reveals that current liabilities exceed current assets on an ongoing basis, the latest reported figure being net current liabilities standing at £1.63m.

The company has ongoing overdraft facilities from its bankers. According to managing director Ruairi Cunningham, the bank understands the business, having worked with the family for many years.

The limited company retains thin profit margins. As a “thorn in the side” of some very big competitors, Strathroy has faced rumours over the past couple of decades suggesting that the company is about to be sold or to fold but it has confounded its critics and won unpublicised admiration from some who marvel at its willingness to take on big challenges and grow the business.

The move by Strathroy Dairy to purchase milk ex-farm in the Republic of Ireland is reminiscent of the time, in the late 1980s, when a company called Strathroy Milk Marketing (SMM) was set up by Co Tyrone man, Eamon Cunningham, to buy milk directly from farmers in Northern Ireland and sell it into the Republic of Ireland.

At that time, the statutory Milk Marketing Board for NI had monopoly control of buying all ex-farm milk in NI that was for sale to processors in NI.

The loophole exploited by Cunningham and over 200 farmers who joined the business was that EU regulations allowed them to operate outside the MMBNI if the milk was being sold to another Member State.

The main customer was Town of Monaghan Co-op and a price premium (around 1p/litre) was returned to Northern milk producers.

Ultimately, the milk pool of SMM was sold to Town of Monaghan in a deal under which the suppliers became shareholders in the co-op.

Meanwhile, the Cunninghams were developing Strathroy Dairy Limited outside Omagh, where new facilities were built to process and pack liquid milk for the retail trade. With a substantial dairy farm, the family was already a “producer-pasteuriser” of milk, serving retail outlets. They have been involved in the milk business since before the partition of Ireland.

The building of a standalone modern dairy away from the farm yard was with a view to expanding that side of the business.

They had their own branded milk and distributors in the North and parts of the Republic. They had wide distribution across NI in conjunction with Co Armagh-based bakery, Linwoods.

These were lean and hungry commercial operators who focused on low cost and efficient delivery of good quality, competitively priced, staple products, serving the smaller independent shops and fuel station forecourts.

Linwoods subsequently created their own brand for milk, which was packed by Strathroy. Then Avonmore/Glanbia got in as supplier to Linwoods. It is a competitive business.

But the opportunity to expand further came with the arrival of Lidl and Aldi. Established big retailers within Ireland sought to make life difficult for them, by exerting pressure on processors not to supply milk to Lidl or Aldi. The same big retailers had been pressed by their milk suppliers not to entertain approaches from Strathroy.

As Aldi and Lidl have grown, so has Strathroy Dairy, with four of the current generation involved and over 130 people employed. The processing facility at Omagh is among the top three in Ireland, handling around 130m litres per year. They have their own equipment on site for blow-moulding of plastic containers.

The focus of the business has been on delivering the goods with the efficiency of service required by the customer.

The National Dairy Council promotion of milk produced and packaged in the Republic of Ireland has been a challenge.

After sourcing milk from southern dairies and unsuccessful attempts to buy milk ex-farm in the Republic over the years, Strathroy has more recently been purchasing milk ex-farm in Donegal, although still processing at Omagh.

Separate silo storage and separate processing and packing runs are operated to segregate the southern milk. They also do lines for organic milk, Ayrshire milk and other specialities.

According to Ruairi Cunningham, the opportunity to buy milk ex-farm in Wexford fulfils an aspiration to grow the business and its milk pool. He is “happy that we can hold our own in a straight fight on liquid milk – we are reasonably efficient.”

He says that if farmers are treated with respect, they will stay with a company.