Kanturk-based North Cork Co-op Creameries processed the equivalent of 215m litres of milk in 2017, up 20% on the previous year. The increase was driven by a 10% rise in own milk supplies (to reach 46m litres) along with an increase in volumes from third-party processing arrangements. The co-op has contracts in place to process milk on behalf of Fealesbridge and Hendleybridge, Boherbue, LLMP, Lee Strand and Dairygold. The co-op processed 110m litres on behalf of these co-ops in 2017 – 60% more than the previous year. It also processed whey cream, a byproduct from cheese manufacture.

Turnover at North Cork increased 51% during the year to reach €102.8m. Operating profit increased 21% to €393,531, meaning margins were back slightly from 0.5% to 0.4%. Earnings (EBITDA) increased by €250,000 to €2m.

North Cork, with around 200 milk suppliers, paid an average milk price of 37.6c/litre in 2017. This included a 0.75c/litre bonus which was paid out in early 2018 based on 2017 volumes supplied.

Pat Sheahan, CEO of North Cork Co-op, said 2017 was a very successful year for the co-op and that it was one year ahead of target in its five-year strategic plan. He said the performance was driven by an ongoing focus on “innovation, efficiency and driving more value out of milk”.

He added that the co-op has continued to invest throughout the year. During the year the co-op invested €1.7m which follows €2.8m in 2016, with €3m earmarked for 2018. All of this was funded through internal cashflows. Most of this was invested on a bulk bagger, capacity and efficiency improvements.

He says by the end of 2018, the co-op will have invested €19m in total over the last six years. The co-op has no bank debt, with a positive cash balance of €765,000 at year end.

“We are a niche value-added processor and while we may not have scale like others, we believe there is a role for processors with 2-3T driers.” He added that “we have the capability to do smaller niche batches where larger processors may not be most efficient to do this”.

In February, the board of North Cork announced it was merging with the Feale Bridge and Headley Bridge Co-op. Both co-ops had already worked closely together whereby North Cork processed milk into a range of products for Feale Bridge and Headley Bridge. Under the merger, the members of Feale Bridge and Headley Bridge Co-op became full members of North Cork Co-op.

Sheahan said this merger is in line with the strategic objectives of growth at North Cork. Before the merger, around half of the 14m litre milk pool of Feale Bridge and Headley Bridge Co-op milk was processed by North Cork and the balance by Kerry Group. The balance will now be processed by North Cork, which will add another 7m litres to the business.

Liquid milk volumes increased 23% to 6.6m litres and was primarily driven by own-label contract wins, especially in higher-value milk products, according to Sheahan.

He said the co-op has plenty of spare capacity, which now sits at 320m litres. He said: “We are about our shareholders and paying a competitive milk price. We are confident about the future and see our place as a bespoke ingredient supplier.

Net asset value fell slightly from €16.2m to €15.8m. North Cork is also currently engaged in merger talks with Newtownsandes, a Kerry-based co-op whose 70-odd members produce up to 23m litres of milk every year. Newtownsandes co-op is looking for a new processing partner after Kerry Group announced it would cease processing Newtownsandes milk from early 2018.