Arrabawn has announced that it has signed a gas supply deal, valued at over €2m per annum, with Vayu Energy.

The deal will see Arrabawn supplied with natural gas to meet it's year-round energy requirements for its dairy ingredients manufacturing facility in Nenagh, Co. Tipperary.

The agreement with Vayu follows Nenagh's connection to the national gas network and will see the energy provider supply Arrabawn with direct access to wholesale market prices for natural gas.

A statement from Arrabawn said that this will allow the Group to purchase gas at the best price available in the market - thereby resulting in significant savings in energy costs.

Vayu will also provide Arrabawn with risk management tools and a bespoke reporting solution to track the energy performance at its Nenagh facility in real time.

Michael O’Kelly, Financial Controller said that the partnership with Vayu is a critical component of Arrabawn's ongoing cost efficiency strategy and will enable the Group to significantly reduce operating costs by shifting to natural gas as its 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."

Stephen Behan, Energy Specialist at Vayu said that as its partnership with Arrabawn shows, cost competitiveness is a key requirement for businesses as they look to better manage their energy supply.

"For larger energy users in particular, we’re seeing a move toward more sophisticated procurement solutions that combine innovations in risk management with hands-on market analysis to minimise energy costs."

Arrabawn operates across three divisions covering dairies, dairy ingredients and agribusiness. The Group was established in 2001 following the merger of Nenagh Co-op and Mid West Farmers Co-op.