Tipperary Co-operative Creamery is planning a joint mushroom venture with Monaghan Mushrooms which will create 350 jobs within three years.
The new business, to be called Tipperary Mushrooms, will be based in Tipperary town.
The final details have to be agreed but Tipperary Co-op may hold a 51 per cent stake in the £5 million investment. The development, said Tipperary Co-op, will be supported by the establishment of a mushroom farm and packhouse which will create 100 jobs in Tipperary and a further 250 by satellite growers throughout the county.
An additional 40 to 60 jobs are expected to be created in back-up services within the next three years. Tipperary Co-op, which has also announced a rise in profit before exceptional costs and tax from £614,000 in 1996 to £769,000 in 1997, said 50 entrepreneurs are being sought within the county to produce 13.5 million pounds of mushrooms.
Overall production is projected to reach £17 million annually which will generate sales of more than £12 million within three years. The new company should move into profit within 18 months, according to a Tipperary Co-op spokesman. The project is receiving £400,000 in grant aid, some of which is coming from the EU.
The co-op is continuing with its diversification programme. A new business was added last year with the acquisition of a supermarket in Tipperary.
The increase in profitability last year arose despite a marginal contraction in sales from £67.4 million to £67.1 million. The higher profits arose because of cost controls which led to improved profit margins, and a six-month contribution from the supermarket.
In addition, nearly £1 million was spent on automation in milk intake, and separation and powder bagging facilities. "This investment is part of the ongoing cost control programme, to ensure that the society maintains modern cost efficient production by utilising advances in production technology," said the chief executive, Mr Noel Horgan.
The co-op was affected by the strength of the pound to its trading customers, France and Germany. Dairy markets fluctuated widely during the year - starting on a weak note and ending strongly, the co-op said. It remains in a strong financial position. At the year end, it had minimal borrowings and shareholder funds of £14.5 million.
