Volac, the UK-based dairy ingredients and animal nutrition group, racked up a £2.5m (€2.9m) loss for its 2018 financial year. Volac described 2018 as a “challenging year” and blamed the losses on a combination of weak dairy markets coupled with higher raw material costs.

The company saw its turnover for the year decline by 10% to just over £241m (€276m), which was mainly due to a 23% collapse in sales to European customers to £127m (€145m).

Sales to Irish customers rose 12% to just over £24m (€28m), while UK sales increased 9% to £67m (€76m). Sales to international markets grew by 11% to reach £24m (€27m).

Gross profit

Volac’s gross profit slumped by 40% in 2018 to below £32m (€36m) as gross margins narrowed from almost 20% in 2017 to just 13% last year. The company recorded an operating loss of £2.7m (€3m) for 2018, having made operating profits of almost £20m (€22m) the previous year.

Despite the losses, Volac paid out £6m (€6.9m) in dividends to its parent company Woodford Holdings Ltd, which is controlled by the Neville family, which founded Volac in the UK in the 1970s.

Kells plant

Last year, Volac completed the construction of a €3.3m finishing and packaging plant near Kells, Co Meath to produce finished milk replacer for calves for the Irish and overseas export markets. The company also began construction of a new milk drier in Wales last year to produce whey protein for the human nutrition market. Volac expects this drier to be completed in 2019.