For the last number of years most Irish milk processing businesses have been focused on increasing capacity and new product lines.

The west Cork co-ops centralise this investment in milk processing at Ballineen under the trade name Carbery. Under this banner, the four co-ops have expanded and diversified the dairy business. This allows the individual co-ops to manage a diversified portfolio alongside the milk business.

I’ve taken a number of the key metrics from the recently published annual reports and compared them to 2019. Obviously 2020 was a very different year to 2019 given what happened with the COVID-19 pandemic, but like the other dairy businesses profiled on these pages heretofore, dairy businesses in general performed very well in 2020.

The west Cork co-ops are an integral part of the west Cork rural community

The four co-ops directly employ over 1,200 people and have over 1,200 milk suppliers along with businesses such as pharmacies, supermarkets, and pig and fish processing facilities.

Indirectly, there is of course a huge spin-off to other service businesses working alongside each of the businesses listed above. The west Cork co-ops are an integral part of the west Cork rural community.

Fish business hit hard at Lisavaird Co-op

Like some of the other west Cork co-ops, the Lisavaird business has a number of different parts.

The core businesses are still milk supply, the feed mill and agri trading, but the foods business is nearly as big now. The dairy business makes up €42m of the €117m classified as food revenue and when you include the agri trading and feed mill, the business is effectively split 50-50 between the core business and the foods businesses.

Milk supply grew again in 2020. Total milk processed was 128m litres, up from 122m litres the year before.

Overall operating profit was €3.5m for 2020, up slightly from €3.2m in 2019

Since quotas were abolished in 2015, milk processed has increased 56% (82m litres in 2014 to 128m in 2020).

Most of the supply growth has come in the Clonakilty and Ballycummer catchment areas.

The number of suppliers has fallen from 267 to 251 since 2015.

Overall operating profit was €3.5m for 2020, up slightly from €3.2m in 2019.

Lisavaird CEO Pat Moriarty said: “Anything food-service-related got hit hard in 2020. Our Glenmar shellfish business and seafood businesses were probably most affected.

“Some of the other businesses were affected early on but bounced back in the second half of the year as costs were slashed, and as the retail business picked up considerably.”

Glenmar exports a lot of fish so the reduced air freight availability hit this business. However, increased trading of fish products with Italy helped.

Lisavaird has a confectionery business called Coolmore Fresh Foods and it wasn’t badly affected as it is a mostly retail business.

The pig farm has 750 sows, taking all pigs produced to slaughter (selling 21,564 pigs annually)

The co-op also has a spreads business, JDS Foods, which had a good year of retail sales. However, it incurred additional Brexit-related costs.

Glen Aine Foods, the cooked meats business, was also affected by food service closures, but it has a strong retail business which helped.

Lisavaird has a dairy farm and a pig farm.

The pig farm has 750 sows, taking all pigs produced to slaughter (selling 21,564 pigs annually). Two new fattening houses have recently been constructed.

Currently the feed mill at Lisavaird central is getting an uplift and a second line installed, with total investment circa €5m (selling 46,300t of feed annually).

Lisavaird has a 50% joint venture (JV) in Owenreagh windfarm and a 50% JV in a property investment company Drinlis.

Lisavaird chair Cormac O’Keeffe was this week elected chair of the Carbery board.

In total Lisavaird co-op employs 310 staff (145 in 2015)and paid out over €11.6m in wage costs in 2020.

German property sold – Drinagh Co-op

Drinagh Co-op is the biggest of the four west Cork co-ops, with a large milk catchment area and a milk supply over 200m litres.

Again, the core business is milk, agri-trading stores and the feed mill. The stores play proportionately a bigger part in revenues for Drinagh relative to some of the other west Cork co-ops. The milk business is 52% of turnover (€79m) with the stores 32% (€48m) and then the feed mill at 16% (€25m).

Drinagh central, Skibbereen and Bantry are the key trading stores for Drinagh.

Since quotas were abolished in 2015, milk purchased has increased 43%

Drinagh has a strong retail presence in the towns of Skibbereen and Bantry (agri trading, hardware and grocery sales) and in 2020 sales in Skibbereen shot up €1.2m (€12m to €13.2m) with the boost coming from agri trading.

Milk supply grew again in 2020. Total milk purchased was at 214m litres, up from 205m litres the year before.

Since quotas were abolished in 2015, milk purchased has increased 43% (150m litres 2014 to 214m in 2020). While supply has grown, the number of milk suppliers has fallen from 591 to 536 since 2015.

In total, Drinagh Co-op employs 210 staff (185 in 2015) and paid out over €9.7m in wage costs in 2020.

The big change noted in the Drinagh accounts for 2020 was the sale of its investment property in Germany. In December 2019 the investment property was valued at €15.2m and it sold for about €15m in December 2020.

The German building with tenants was in Dusseldorf and was over 80% occupied with tenants on a regular basis.

The decision to sell was primarily based on the offer received and streamlining business management.

The outstanding debt of about €7m associated with this investment was cleared with the sale proceeds.

Despite the COVID-19 difficulties, the co-op had a strong trading year

Drinagh chair TJ Sullivan said: “Over the life of this investment a sizable cash profit was made by the society.”

Seamus Daly is CEO and local dairy farmer Donal McCarthy from Ballydehob was elected as chair this week, taking over from Sullivan, who was Drinagh and Carbery chair.

Daly said: “Despite the COVID-19 difficulties, the co-op had a strong trading year which facilitated the board approving strong bonuses at year end.”

The are four pharmacies owned across the catchment.

Barryroe Co-op

Barryroe Co-op hugs the coast of Ballinspittle, Kilbrittain and Timoleague.

In 2020 the annual report shows it had 185 milk suppliers.

Since 2015 milk supply has increased 40% and was up a touch (3.4%) in 2020.

Alongside the milk business, over 13,000t of grain is harvested in the catchment and supplied to Barryroe Co-op.

Pigmeat processing is a part of the Barryroe Co-op business

Barryroe has also just upgraded its feed mill.

The co-op has a significant Eurospar supermarket which it owns and turnover increased in 2020 as it operated a home delivery service.

Pigmeat processing is a part of the Barryroe Co-op business.

Based in the picturesque village of Timoleague, Staunton Foods Ltd opened a new purpose built factory in 1996 and then subsequently expanded the factory in 2005, 2008 and again in 2012.

This allowed Stauntons to grow to become a significant pigmeat processor in Ireland.

Stauntons slaughters and debones in-house and supplies fresh and frozen product to Ireland and Europe.

It processes between 8,000 and 9,000 pigs weekly, which equates to circa 12% of the national weekly kill.

In terms of turnover food produce is the mainstay of the business at €125.1m with agri trading at €33.5m in 2020.

Barryroe has a significant share in Clona Dairies, the liquid milk business. In total Barryroe Co-op employs 312 staff (275 in 2015) and paid out over €11.8m in wage costs in 2020.

Investment property is still part of the Barryroe income mix and the co-op has 100% owned Irish and German property holding companies, which own German retail businesses and Irish forestry and hotel business.

Bandon Co-op moves into online retail

Bandon Co-op is in effect the nearest west Cork co-op to Cork city.

It has invested resources in adding value to milk with Bandon Vale cheese, which is a modern production unit packing cheese for a variety of customers.

Given its proximity to large towns and cities, Bandon is probably the better positioned of the west Cork co-ops to service a larger retail and hardware market

It also packs butter and recently lost the Ornua contract for packing butter when Ornua opened up its own facility at Kerrygold Park near Mitchelstown.

However, Bandon had to pivot and is now cutting out a niche in flavoured butters and some contract packing.

Bandon has a play in liquid milk with Clona Dairies but with margins very tight in this business, cost control was the order of the day for Bandon for the last number of years.

The accounts for 2020 show turnover was up €3.4m, gross profit up over €2m and operating profit up slightly. In a pandemic year that’s not bad.

Given its proximity to large towns and cities, Bandon is probably the better positioned of the west Cork co-ops to service a larger retail and hardware market. Recently Bandon launched an online store with 12 different categories from pet care to plumbing.

It has a strong foothold in this retail space already, with three retail shops at Bandon, Enniskeane and Kinsale.

Land quality around Bandon would be better than some parts of west Cork

The online shop in effect is an extension of these shops and gives Bandon Co-op an online presence in retail. Upgrades to the retail stores at Bandon and Enniskeane are ongoing.

However, the core business for the co-op is dairy and milk supply to the co-op continues to grow.

Land quality around Bandon would be better than some parts of west Cork and there is a strong tradition of dairy farming on a larger scale in the Bandon catchment.

In 2020, 145m litres were supplied to the co-op, up from 135m litres in 2019.

In 2020, Bandon had 250 milk suppliers. Similar to the other west Cork co-ops milk supply has increased significantly since 2014 (just prior to quota removal).

In total Bandon co-op employs 362 staff.

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