The $260 million to $300 million investment will be the largest in nutritional powder capability and capacity in Australia, focussing on infant formula.

MG board chairman Philip Tracy on Wednesday said it would continue to invest in its business strategy for the next financial year with the Koroit development “a significant pillar in achieving the company’s strategic goals”.

“Investing in new production systems is the way to go,” he said.

“We’re moving back to high-value products like nutritional powders.”

His commitment to the Koroit development came after MG announced a $40 million profit for the past financial year, drawing criticism from some farmers, who are struggling to survive following cuts to the milk price.

Adding to their anger was the revelation MG’s board collected $1.657 million last financial year, up from $1.2 million the previous two years.

The 38 per cent pay rise could have been higher if the entire board had not waived its fees for the last two months of the financial year. The company did not say whether the pay cut would continue.

Former chief executive Gary Helou – who departed in April – received $3.3 million for the year and the smallest pay rise went to chairman, Philip Tracy, with an increase of 35 per cent. 

Mr Tracy said MG would be making “significant cost reductions moving forward”.

Farmer Power vice president Alex Robertson said if he was still a shareholder he’d be furious. 

“Until they get rid of the board, nothing is going to improve,” he said. “Big questions really need to be asked and shareholders need to ask them.”

David Basham, acting president of advocacy body Australian Dairy Farmers, said farmers would now endure an entire year of being paid less for their milk than the cost of producing it.

"We think that about $5 to $5.20 is about where cost of production is in the current environment and this is a good way below that."