ACM chairman Michael Auld said the work should start on the site, next to the old Girgarre cheese factory, in December pending planning approval.
The factory, expected to be open next year, would initially employ 30 to 35 people and process 100 million litres of milk.
The announcement has been greeted with great enthusiasm by Girgarre residents who have not seen milk processing in the town for 38 years.
The company may recruit some experienced staff from the Rochester’s Murray Goulburn factory, which is shutting down soon.
The company, which has been recruiting organic dairy farmers recently, intends to install two spray dryers and a discrete processing system which will allow them to handle organic and non-organic processing concurrently.
ACM has bought 10ha of land next to the old factory site.
