Dairy co-op Aurivo, formerly Connacht Gold, saw profits jump 70 per cent to €8.9 million last year despite the collapse in milk prices.
On the back of a €40 million investment programme, the group also announced plans to expand milk production by 25 per cent by 2020, which equates to an additional 100 million litres.
The move coincides with the removal of Europe's long-standing milk quota system and the rising demand for dairy products across Asia and Africa.
Aurivo chief executive Aaron Forde told The Irish Times the €40 million would be used to upgrade existing plants and capacity and to invest in new technology "to take us into new markets".
The co-op now exports milk products to more than 50 markets across Africa, Asia and South America. It commands just over 30 per cent of the Nigerian powdered milk market.
Announcing its results for 2014, the group, which processes milk on behalf of about 1,000 dairy farmers in the north west, said its strong performance was achieved while significantly lowering its debt from €12.9 million to €1.4 million.
The figures, however, showed turnover fell marginally to €447 million in what was described as a “volatile year” for dairy farmers.
2014 marked the end of a six-year boom in milk prices with oversupply and demand weaknesses sending the market into a nosedive.
While the market continued to deliver “inadequate returns” to the processor, Aurivo brands performed better than most in the market place, the group said.
Last year, it acquired UK sports nutrition company For Goodness Shakes giving it a greater foothold in the growing protein shakes market here and in the UK.
“This brand is very aligned to our growth agenda in the health and nutritional area,” it said, noting it had gained listings in all major retailers. The group’s chief financial officer Donal Tierney said Aurivo had secured €40 million in additional financing for future acquisitions.
In terms of the outlook for the sector as a whole in the post-quota era, Mr Ford said: “The journey won’t be a straight line and it won’t be simple,” noting the current level of volatility in prices. However, he said diary demand was expected to grow, in global terms, by 2-2.25 per cent annually.
