Tirlán Announces 2023 Annual Results

Tirlán, Ireland’s leading farmer-owned dairy and grain co-operative, has today published its Annual Report and Accounts for 2023, reflecting a resilient performance during an extremely challenging year for the Irish dairy, grain, and wider agriculture sector.

Key highlights: 

• Group turnover of €2.53 billion, a 17% year-on-year decrease, as commodity market prices fell from record highs
• Strong and supportive of Members, with €1.3 billion paid to farm families for milk and market-leading price paid for grain
• Progress on Living Proof sustainability targets through a 6.3% reduction in on-farm carbon footprint from 2018, with over 95% of milk suppliers participating in the €16 million Sustainability Action Payment programme in 2023.
• Modernisation of Co-op Member representative structure to deliver greater gender-balance and inclusion of young farmers
• Focus on innovation in dairy and plant-based products for new markets
• €220 million Kilkenny Cheese Joint Venture continental cheese facility in commissioning phase

Total turnover for 2023 stood at €2.53 billion, a 17% decrease compared to 2022, as prices fell from record highs as a result of a decline in global dairy markets. Operating profits were €68.3m, a reduction of 5% year-on-year, as a result of a number of factors including inflationary pressures and the commitment of the organisation to supporting farmers through a difficult period.

In the midst of these challenges, the performance of the 100% farmer-owned co-op remains strong, with an equity value of €1.3 billion. A continued focus on financial discipline delivered significantly reduced net debt, down from €234 million in 2022 to €155 million last year, the lowest level in a decade. Over that 10-year period, Tirlán invested over €600 million in new high-spec processing assets and an Innovation Centre to bring its outstanding grass-based milk and quality grains to over 95 countries around the world.

The downturn in markets were reflected in significantly lower average milk and grain prices in comparison with 2022 - 44 cent per litre (cpl) (including VAT) for milk down from 63 cpl; and €205 per tonne of green feed barley compared to €310. Tirlán provided a series of supports during the year such as a high price paid across the peak supply months, feed supports and a bonus of €5.8 million to Members who traded with us through our 52 agribusiness stores and online. In addition, the organisation paid a strong dividend of 19.058 cent per share to Members for 2023, amounting to €6.5 million.

Commenting on the 2023 results, Tirlán Chairperson John Murphy said that the robust performance and strong balance sheet showed the true strength of the co-operative as it was able to assist its farmers in early 2024 with significant weather-related price and feed supports. He emphasised that Tirlán remains focused on paying the best possible milk and grain prices to suppliers and that a focus on debt reduction in addition to a new Investment Fund of more than €210 million means that the business is well-positioned for strategic growth and expansion into the future.

John Murphy commented: “The challenges faced by both the sector and farmers last year were unprecedented. Weather, input costs, and regulatory change combined to cause considerable concerns for our farm families who are already in the midst of significant change. The organisation remained strong and supportive through its advisory teams who engaged with our farm families on a daily basis.

“While prices rise and fall, the quality of our products and raw ingredients remains. That is the basis on which we are looking to the future, confident that a series of business decisions that we have made in recent years provide a strong foundation for growth. We have made major investments in diversified production facilities, alongside developing our R&D and commercial teams, and are constantly seeking new opportunities for our expanding portfolio of brands on international markets.

“It was wonderful to see our Members approve a series of proposals to modernise our Co-op delivering greater gender-balance and involvement of our younger farmers. In addition, our new Governance Academy will help to build deeper knowledge of our Co-op for the future.

“I am excited for the future of Tirlán and want to thank all our Members who contribute so much to making us Ireland’s leading dairy and grains Co-op. I would also like to pay tribute to outgoing CEO, Jim Bergin, for his authentic leadership and his advocacy for Tirlán farmers. The successful establishment of Tirlán as a stand-alone 100% farmer-owned co-op is his legacy, and we all owe him an enormous debt of gratitude for his work, vision, and commitment.

“We are fortunate to have someone of the calibre of Seán Molloy to take Jim’s place as CEO. I and all the members of the Board look forward to working with Seán in the years ahead as we build the future of Tirlán together.”

Speaking about the 2023 results, Tirlán CEO, Jim Bergin, said that the organisation’s overall performance in a turbulent year reflects the underlying strengths of the business. He said that the upcoming opening of the Kilkenny Cheese production facility at Belview in Kilkenny demonstrated the forward-looking, innovative and dynamic business that Tirlán has become.

Jim Bergin commented: “Agribusiness faced many challenges in 2023 and I am proud that we still managed to maintain competitiveness and deliver strong supports for our farmers. While circumstances remain challenging, we remain optimistic as we look to the future as we have a strong, stable core business that is well-positioned to continue to invest and innovate for the future.

“Our performance is achieved through the hard work and dedication of our 5,000 farm families and our 2,300 talented employees. This is a business of which we are proud and I am very grateful to all who have made Tirlán what it is today.

“As I prepare to step down as CEO of Tirlán, I am extremely excited for its future as we continue to make progress and show real leadership for the sector. In a matter of months the Kilkenny Cheese production facility is on track to open as Europe’s most efficient and sustainable continental cheese facility enabling us to bring new products to new markets. We are continuing to meet and deliver our Living Proof sustainability targets by positive action across all elements of our business.

“We are firmly focused on following best practice on water quality on our farms, with our recently launched Farming for Water: River Slaney Project focused on driving collaborative action at farm and community-level for the benefit of all.

“Tirlán and its farmers are major drivers of the rural economy, supporting over 19,200 jobs and generating over €5.5 billion in economic activity*. It is key that we all work together to improve water quality. Maintaining Ireland’s derogation from the EU Nitrates Directive beyond 2025 remains a fundamental part of ensuring the viability and prosperity of our farmers and rural communities. I welcome the Government’s stated aim to achieve this.

“I wish my successor, Seán Molloy, the very best as we all work together to develop our co-op for the future.”

Overview of key points of Tirlán Annual Report and Accounts 2023

Strategic Performance

Under the Nourishing Ambition strategy, Tirlán remains well-positioned to meet challenges and maximise opportunities, with a focus on adding value to its portfolio, through ongoing product innovation to grow international markets.

In 2023, over 422,000 tonnes of dairy ingredients were sold to markets worldwide. Tirlán used its significant expertise in whey protein to launch a bespoke B2B brand, Promiko, in the sports nutrition market.

The consumer category, which has a portfolio of award-winning brands such as Avonmore, Kilmeaden, MyMilkman.ie and the Truly Grass Fed range, continued its focus on innovation with Avonmore entering the plant-based drinks sector with the launch of its Avonmore Oat Drink made from Irish oats.

The business continued to grow new markets, with the expansion of the Avonmore Professional UHT range in China and Vietnam and entering the new markets of Malaysia, Thailand and the Philippines in South East Asia.

Sustainability in Action

As part of Tirlán’s Living Proof sustainability strategy, Tirlán has signed up to the Science-Based Targets Initiative (SBTi), with ongoing progress on its 2030 targets for Scope 1 & 2 carbon emissions (production and supply chain) and Scope 3 (on-farm emissions). With the vast majority of milk suppliers embracing new technologies, such as low emissions slurry spreading, continuous progress has been achieved in on-farm emissions (Scope 3) with a drop of 6.3% in the carbon footprint of milk production to 0.89kg CO2e/kg FPCM (Fat and Protein Corrected Milk). It is a reflection of the positive actions taken on farm, with over 95% of farmers participating in the €16m Sustainability Action Payment programme in 2023.

Tirlán expanded its FarmGen solar PV renewable energy solution, with over 300 units installed or pending on farms. In addition, over 360,000 low-cost trees and hedges were supplied through Tirlán agri branches since 2020.

Future-focus

The new Kilkenny Cheese production facility, a joint venture with Dutch family-owned dairy company Royal A-ware, is a key part of Tirlán’s diversification and investment strategy and will be one of Europe’s most efficient and sustainable continental cheese production facilities.

It will employ around 80 people full-time and deliver new products for new markets, with a plan to produce over 50,000 tonnes of continental cheese per year, including Edam, Gouda and Emmental cheese varieties.

As part of Tirlán’s long-term growth ambition, the business has an investment fund of over €210m available as it continues its focus on diversifying and adding value to the organisation. 2023 saw the launch of the new Tirlán Nurture Fund, which is a €10 million investment platform targeting innovative agrifood-tech solutions.

*Economic Impact Study carried out by independent consultants EY on 2022 Tirlán figures