An Irish dairy and animal feed co-op has signed a deal, worth over €2 million annually, with Vayu Energy.

Arrabawn Group signed the agreement which will see Vayu supply the firm with natural gas to meet the year-round energy requirements for its dairy ingredients manufacturing facility in Nenagh, Co Tipperary.

Arrabawn operates across three divisions covering Dairies, Dairy Ingredients and Agribusiness.

The energy deal follows Nenagh's connection to the national gas network and will see Vayu provide Arrabawn with direct access to wholesale market prices for natural gas, allowing the Group to purchase gas at the best price available in the market.

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Mícheál O'Kelly, Financial Controller: "Our partnership with Vayu is a critical component of our ongoing cost efficiency strategy and will enable us to significantly reduce operating costs by shifting to natural gas as our main fuel source. It comes at an exciting time for our business on foot of our recent completion of a €15.7m capital investment programme, which has allowed us to achieve substantial gains in efficiencies and a significant increase our competitiveness.

"Not only does the deal provide our business with significant cost benefits through direct access to wholesale energy prices, but we are partnering with a company that has demonstrated a deep understanding and expertise of Ireland’s energy market."

(CD)