Newmarket Co-op

Source: Energy Digital

Date :11/04/2008 15:44:26

Set up in 1944, Newmarket Co-op. is located in fertile land in North West Cork, Ireland. Michael Cronin tells Exec about the Co-op’s plans for the future

Written by Lucy Mowatt and Produced by Tom Lloyd

Ireland is a country almost ideally suited to dairy farming. With the advantages of a warm climate, supplied by the Gulf Stream, Ireland has a fertile soil, suitable for growing grass that can be grazed almost all year round. County Cork is no exception; it is home to a plethora of dairy farms and cheddar cheese manufacturer Newmarket Co-op., which is looking to take advantage of a number of other favourable factors.

Set up during the Second World War, Newmarket Co-op. has gained extensive experience in cheese manufacture, although it also has agricultural, home store and supermarket businesses. At present, its annual turnover reaches approximately €65 million and it has a total milk pool of 36,368,800 million litres, which are supplied by 160 milk suppliers across the County.

In addition to the milk it sources from its own member dairies, in 1994 the Co-op. started to purchase milk from neighbouring co operatives and it now processes in the region of 159,113,500 million litres each year. In particular, Michael Cronin, company CEO, says that Newmarket Co-op. works very closely with similar organisations in Kerry, Arrabawn, Newtownsands, Fealsbridge and LLMP Co-op.

Contract manufacture of cheese was arranged in 2007 with Arrabawn Co-op, which will facilitate Arrabawn’s first venture into cheese manufacture. Such relationships will help to develop the dairy industry within Ireland, not only business for Newmarket Co-op.

Dairy Processing Grant

The plant manager, Pat Buckley, and his team have worked hard to ensure that the cheese factory efficiently makes use of all this milk in order to produce a top quality cheddar cheese product, while continuing to expand and develop the business.

Major investment in the plant has taken place at the cheese plant since 1990, rendering it extremely efficient and modern. This strategy of investing to maintain growth has also been awarded government help.

In April of 2007, the Minister for Agriculture & Food, Mary Coughlan T.D. announced details of 19 Capital Investment Projects, which will award Government Grant Assistance worth over €114 million under the Dairy Investment Fund. Under this framework, Newmarket Co-Op. was awarded aid worth €6.73 million, which will be put towards a €16.82m cheddar cheese expansion project.

The Board of the Co-op. recently decided on a major revamp and expansion of the cheddar plant - and completion of this expansion is expected by the spring of 2009. These investments will result in a more competitive business, able to meet the demands of the global dairy market.

The Co-op. has also made moves to minimise its impact on the environment. At the Repak Recycling Awards, 2005, Newmarket Co-op won the Best Practice Small Firms Award for the attempts it has made to reduce its levels of waste, as well as encouraging the reuse of materials. Packaging has also been significantly minimised; in 2006 it reduced the amount of packaging placed on the Irish market by 33 tonnes.

Cooperative agreement

Mr Cronin, who is a strong advocate of the principles of co-operative membership, believes that the Irish Dairy Industry, with its co-op structure has served the dairy farmers of Ireland very well. He asserts that the present structure is very efficient and explains that a huge level of co-operation exists between the dairy processors, which helps to ensure that Irish farmers are paid an excellent price for their milk.

Newmarket Co-op. has consistently paid one of the top milk prices in Ireland and, in 2006, it won the KPMG Audit which compares milk prices paid by Dairy Processors in Ireland. Mr Cronin says it is important that the Co-op. continues to position itself as a top payer for milk because milk suppliers expect their offers to be up with best when it comes to price.

Support network

Mr Cronin sits on the Board of the Irish Dairy Board (IDB), and has been its Chairman over the past six years. He says that while milk prices for dairy products have lifted considerably since the beginning of 2007, the biggest challenge for farmers and processors is to deal with the much more volatile situations that now exist on dairy markets - situations which will see milk prices rise and fall dramatically. He says that market sentiment at the moment is poor and if they remain at these levels there is no doubt milk prices at farm level will fall in the short term.

Factors including increased energy prices and consequent investigations have meant that land prices in Ireland have soared, as energy companies look to find viable sources of energy, through cereals, for example.

The IDB was formed in 1961 and has continually looked to overcome challenges for Irish dairies. Indeed it has sought new geographic markets for its products all over the world. Subsidiaries have been established in the US, UK, Germany, Belgium and France in order to help with this. Under its Kerrygold brand, €2.1 billion worth of IDB products is sold annually, which contributes to Ireland’s 80 percent export figure.

With an ideal environment for grazing healthy cows, as well as investments in technology and expansion, Newmarket Co-op’s high quality cheddar cheese products will reach even more customers. The support of the IDB will also mean it is able reach new markets and expand further.

Click here to view the corporate brochure on Newmarket Cooperative Creameries