Dale Farm drives record growth in sales

Dale Farm's continued growth helped United Dairy Farmers (UDF), Northern Ireland's biggest dairy business, achieve a record turnover in 2010/11, an encouraging year for the co-operative year which saw strong value and volume growth, improved profitability and better milk prices for members delivered against a background of high input cost inflation and depressed economic circumstances.

Group turnover grew by 21 per cent to £400 million due to higher members' milk volumes, improved returns, continued growth in Dale Farm and the full year benefit of 100 per cent ownership of United Feeds.

Dale Farm turnover grew by 12.2 per cent to a record £191.6 million. Key areas of growth in the year were cheese, whey protein products and fresh milk. Consumer product sales turnover, however, only grew by 3.9 per cent compared to 36 per cent growth in commodities and 18.5 per cent in food ingredients, with consumer returns in the UK and Irish markets slow to respond to higher dairy commodity prices and inputs costs.

The group brought 42 different new products to market including Dromona Lighter cheese with 30 per cent less fat, a gold medal winner at the Nantwich International Cheese Awards.

Dr David Dobbin, UDF chief executive, commenting on the group's performance, says: "The group has made an encouraging start to 2011/12 delivering further sales growth with cheese and whey protein products performing particularly strongly."

UDF is a dairy co-operative owned by 1,800 farmers. It collects and markets close to one billion litres of members' milk a year and manufactures an extensive range of dairy products for the retail, foodservice and food ingredients for both domestic and international markets.

Group profit before tax increased by 17 per cent to £4.16 million, despite higher input and interest costs. Energy, road fuel and packaging costs increased sharply during the year; however the impact of these additional costs was offset by savings generated from the group's ongoing capital investment and cost reduction activities and by the contribution and unit cost benefits from the greater activity levels throughout the group, especially in cheese and whey protein products.

The group, which employs around 900 people, has operations in England and Scotland, as well as Northern Ireland. It benefited from the continued recovery in dairy markets boosted by strong demand for powder from China and North Africa and for butter from Russia whose internal dairy output was limited by drought. Industry stocks of dairy products remained tight, especially in butter, and global milk supply growth remained modest with output curtailed by adverse weather.

The group continued its ambitious capital investment programme with a total spend of £5.4 million in the year. In addition to this, in January 2011, Dale Farm purchased the trade and assets of the Fane Valley liquid milk business in Northern Ireland after their decision to exit that market. This business was successfully integrated with Dale Farm's fresh milk business providing additional market share and greater economies of scale.

The main capital spend in the year related to the completion of Dale Farm's new chilled distribution centre at Kendal which will support Dale Farm's growth in the GB market.

Pictured is Dr David Dobbin, UDF chief executive.