KOROIT is set to get another multi-million-dollar investment by dairy giant Devondale Murray Goulburn which yesterday announced it would build a high-tech addition to its factory in the town.
The extension will enable the company to extract infant nutrition products from its milk intake.
Construction work is expected to start later this year and be finished in time for the 2015 spring peak season.
Company managing director Gary Helou was vague on specifics yesterday when announcing three new projects worth a combined $127 million in Victoria and Tasmania.
He said a total of $38m would be spent on infant nutrition facilities at Koroit and Cobram, $74m on cheese production at Cobram and $14m at Edith Creek Tasmania.
Mr Helou said further details would be announced when he visited Koroit on May 23.
The Standard understands the company has recently purchased land to the south and east of the Commercial Road factory, which received a $5m expansion last year for butter production.
Koroit is already the company’s and reputedly Australia’s largest milk processing throughput site, handling about a billion litres a year and generating about $750m annually through production of powdered milk and butter.
Less than two years ago the company cut 29 jobs at the site as part of its aim to trim $100 million in costs for the 2012-13 financial year.
Earlier this year it received a $51m windfall from the sale of its shares in Warrnambool Cheese and Butter after Canadian company Saputo won a takeover bidding war.
Mr Helou said the expansion would involve state-of-the-art automation for processing and packaging and increase production capacity to meet expanding international markets for infant nutrition products.
It will require upgrades to energy supply infrastructure.
“These investments secure sustainable skilled jobs in regional Victoria and Tasmania and add to higher farmgate returns which in turn funds regional growth with the vast majority of money spent for farmers in their local communities,” he said.
Moyne Shire mayor James Purcell said the announcement was a fantastic vote of confidence.
“This is a multi-million-dollar project and will generate new jobs,” he said.
“It adds confidence for producers and the rural community and will boost the economy.
“It shows dairying is a viable and sustainable industry which will expand in Moyne.
“The Warrnambool Cheese and Butter company bidding has brought this district to international attention.
“I wouldn’t be surprised if there was further dairy processing investment in the region by other international companies.”
Mr Helou indicated the company aimed to lift the farmgate milk price to $1 a kilogram milk solids by 2017 to encourage existing and new suppliers to invest in their business and expand milk production.
“We are investing to deliver higher farmgate returns as we strive to navigate a new path to serve the growing needs of international consumers for Australian dairy foods,” he said.