While volatile economic conditions sent trading figures and milk prices tumbling for southern Australian dairy companies, a record result for Norco helped pave the way for the most competitive farmgate prices in the co-op’s 114-year history.

Cuts to corporate costs, consolidation of its closely-knit businesses and innovative marketing were key

drivers behind the Lismore-based farmer-owned company recording earnings before interest, tax, depreciation and amortisation (EBITDA) of $8.1 million for 2008-09 – up 2.4pc on the previous financial year.

Another factor behind this strong performance was Norco’s ice cream factory at Lismore, which recorded a 19pc revenue growth for an EBITDA 321pc above that for 2007-08.

In the past year Norco has slimmed its senior management team from nine to just four, and combined dairy manufacturing operations, including milk supply and food production, under the banner of Norco Foods.

Its NSW and Queensland rural stores network and wholesale operations were also consolidated.

Norco’s 145 milk suppliers, who farm between Gloucester and southern Queensland, received an average 56.7 cents a litre for three-year contracted milk and are also in-line for possible retrospective step-ups on the back of the co-op’s solid trading year.

Angling well for suppliers’ hopes is that the co-op is trading at 40pc above its predicted budget for the year-to-date.

Norco’s growth through the global financial meltdown, which took a big toll on world dairy prices and saw Victorian farmgate prices dip below 30c/L, is attributed largely to the cost cutting and centralisation.

Chief executive officer, Brett Kelly, said overall corporate costs were reduced from $6.3m to $5.7m and significant debt reduction – to the tune of $2.3m – had been achieved.

“A project manager was appointed to our agribusiness sector and across all its divisions we went down the path of strong sale-day marketing promotions,” he said.

“We’re developing relationships with customers to lift volumes and bringing in new customers.”

Working capital was at a record low of 1.8pc of sales, which puts the co-operative well ahead of best practice levels of three per cent.