Dairy co-op Murray Goulburn (MG) is advancing plans to build a $300 million milk powder factory in south-west Victoria.
The co-op has signed two new deals with international companies, Kalbe and Mead Johnson, to supply milk powder that will be made into infant formula for the export market.
The factory, which will eventually process up to 90,000 tonnes of milk powder per year, will provide a base ingredient to the export companies for their formula products.
MG managing director Gary Helou said it continued the co-op’s move away from selling fresh milk only.
«Ingredients as commodities are very volatile and unpredictable so we have been methodically moving away from those commodity markets to more stable higher value added dairy products,» he said.
«We’ve already converted our portfolio to the point that today we have 70 per cent of our products going to those products.»
«This will give us sector leading capabilities in supplying the highest quality nutritional powders into those growth markets like Asia.»
Mr Helou said the deals with Kalbe and Mead Johnson gave enough certainty about demand to go ahead with building the factory.
«The build will occur in two stages; the first stage will give us a capacity of 45,000 tonnes, which will be complemented by another stage will take us to the 90,000 tonnes,» he said.
MG already has a large pool of milk to draw from, but Mr Helou said he was keen to add more farmers to the supplier list.
«We can divert some of our existing milk product into it, but obviously we’re looking at growing,» he said.
«It’s this kind of investment in high technology, value-added products, that will develop sustainably higher farm-gate prices.»
http://www.abc.net.au/news/2016-03-15/vic-mg-new-factory/7248078