Tipperary Co-op has reported a strong set of results for 2014, with turnover up 13% to €190.9m, while operating profit increased 40% to €2.5m on the previous year’s results.

These results were delivered despite the weakening global conditions due to falling Asian demand and the surge in global milk output.

With 50% of the total milk intake (245m litres) coming from other co-ops, such as Kerry, North Cork, Glanbia and Arrabawn, Ted O’Connor, general manager, is confident in the future of the co-op and does not feel exposed or threatened by the supplying co-ops diverting their milk to their own factories.

He says it very much suits the other co-ops and Tipperary Co-op has established itself as a niche operator that can handle small quantities and batches efficiently.

As the bigger co-ops get bigger, he feels Tipperary fits a real need and niche in the market. Large dryers and operations don’t handle small quantities efficiently and it suits better to outsource this processing.

He says: “We have the capacity and there is a synergy to the supplying co-ops and Tipperary. The plant is still significant, with a 3.5 tonne/hour dryer, and is well invested.”

This synergy can be seen where the co-op processed a record 245m litres of milk last year. Milk supply grew by 15%, with 29% growth coming from other co-ops. Farmers increased their supply by 4%. Kerry and Glanbia continue to be significant suppliers.

Cheese is a large part of the business, utilising about 51% of the milk taken in. Working closely with Ornua (Irish Dairy Board) the co-op extended its specialist cheese-making abilities.

The co-op also developed an ingredient-type whey powder product and invested in production facilities during the year. This enables it to extract as much value as possible from the cheese side of the business.

Tippagral, the co-op’s French cheese packing and distributing company, performed well and accounts for around €50m turnover. It is currently looking at developing the site further. During the year, the co-op sent more production to butter and less to milk powders and cheese. Butter production was up by 27% to just over 10,000t. Cheese production was back 10% to 5,600t.

With 1,830 shareholders, about 400 are milk suppliers and the co-op has seen about 30 new entrants overall. Bank borrowings showed a decline of €6.4m on a year ago and was as a result of lower levels of stocks and debtors at year end.