Lakeland reports record €1.1bn in sales despite pandemic

Lakeland Daires generated a record €1.09 billion in sales last year – up almost 6 per cent on the previous year – despite what it described as “the major operational, logistical and commercial constraints of the pandemic”.

The group, which acquired rival Lacpatrick in 2019 to form Ireland’s second largest dairy co-op, said the effective closure of hospitality sectors across the world led to high volumes of milk being diverted towards food ingredients.

This benefitted the co-op’s food ingredients division, which accounts for over 60 per cent of the business. It reported an 18 per cent increase in revenue to €691 million.

“Highly versatile milk powders” meant it had the capability to adjust to the changing demands of the market.

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“During the year we manufactured 250,000 tonnes of milk powders and butter, serving important categories such as infant nutrition, health and fitness and consumer foods,” it said.

Products

“We have great flexibility to adapt the formulation of our products and also to divert milk between facilities depending on processing requirements,” it said.

The restrictions around hospitality, however, hit the group’s foodservice division, which generated €182 million in sales, 24 per cent down on the previous year. Nonetheless, it said, revenue was higher than expected given the “ very challenging year”.

The co-op’s other two divisions - consumer foods and agribusiness - reported increased revenue for the year with consumer foods benefitting from the uplift in grocery.

Lakeland also reported an record operating profit for the year of €26 million, up 27 per cent on 2019.

"Aligned to our business achievements, we further consolidated the benefits of the Lakeland LacPatrick merger of 2019, achieving ongoing organisational, operational and administrative efficiencies and contributing to overall economies of scale, value creation and long term sustainability for our 3,200 milk producers, North and South, " chief executive Michael Hanley said.

Lakeland bought troubled Lacpatrick in April 2019 and now commands a franchise stretching across 16 counties on both sides of the Border.

This leaves it exposed to Brexit.

Welcoming the recent trade agreement between Brussels and London, Mr Hanley said the group wished to see the all-island dairy economy continue, "and for the products which are manufactured from cross Border supply chains to be facilitated within EU trade policy, and in agreements with third countries and within EU market support measures."

He said the co-op had been trading normally since the UK's exit, albeit there had been delays on inputs and raw materials coming from Britain to Northern Ireland because of documentation and other controls.

Lakeland collects 1.9 billion litres of milk a year from farms on both sides of the Border and exports dairy products to over 80 countries.

“We expect relatively stable dairy market conditions through 2021 albeit there are still significant challenges in our operating environment as we await the anticipated beneficial effect of worldwide vaccine initiatives,” Mr Hanley said.

“All of our initiatives are focused on serving the long term sustainability of our farm families while working in partnership with our customers throughout the world,” he said.