New Zealand dairy heavyweight Fonterra is to close one of its Australian manufacturing plants in south west Victoria, with redundancies likely among the 130 staff.
Following a review of its manufacturing operations in the region, Fonterra Australia said it planned to invest A$20 million ($25 million) in upgrades at its Cobden and Dennington sites in the next three years, but had decided to close the Cororooke plant.
This site was more than 100 years old and needed major upgrades to meet environmental and production standards, said managing director Fonterra Ingredients Australia Simon Bromell.
The barriers to modernising the plant meant the «most responsible thing to do is close it», he said.
Some staff could be relocated but it was unlikely all could be moved, he said.
Cororooke makes soft cheeses and cream productions. Production would be phased out over the next year.
There would be no impact on Fonterra’s farmers in the region, Bromell said.
All milk would be collected as normal, destined for the nearby Cobden and Dennington sites for processing.
Fonterra wants to keep growing its milk supply in the region to support the planned upgradde investments at these two sites, he said.
The investment programme at Cobden included the purchase of a former National Foods site next to Fonterra’s factory for production expansion.
When Cororooke is closed, Fonterra will operate nine manufacturing plants in Australia, which will handle around 1.7 billion litres of milk this year.
In the past three years, Fonterra has invested more than A$100m in its Victoria manufacturing sites, Bromell said.