First product rolls off line at the Union Dairy Company's Penola milk plant

Dean and Colin McKenna
Dean and Colin McKenna

THE dairy industry's newest player has produced its first packet of milk powder bound for world markets.

Union Dairy Company, run by prominent Warrnambool businessman Colin McKenna, has revealed its Penola milk plant was completed ahead of schedule and budget.

He said the first dried milk products had been produced this week and full production would begin in the coming week. 

The $80 million factory is a joint venture between Mr McKenna’s Midfield Group and Louis Dreyfus, a global merchant company.

"We have overcome various challenges which we faced in building the state of the art plant on a greenfield site,” he said.

“We are delighted the plant has come in under budget and before schedule."

​The plant, the first of two planned by the company, has created work for 35 employees plus milk tanker drivers.

It comes a year after the dairy crisis hit Victoria, with farm gate milk prices taking a steep decrease.

The new processing facility will convert milk into powdered milk, mainly for the export market.

The company has planning approval to build a milk plant in Warrnambool.

Mr McKenna revealed he had been overwhelmed with the number of farmers signing up to supply the company.

"Our businesses are based on trust and credibility and that is what the dairy farmers want,” he said.

“We have been overwhelmed with the support we've received from local dairy farmers. 

“We're confident the business will provide untold benefits through extra jobs and the injection of money into local communities.”

Mr McKenna said Union Dairy Company had made a strong commitment to farmers and suppliers.

"We guarantee no step downs and consistent good pricing for dairy farmers,” he said.

"We start full production in the coming week.

“We have exceeded our first-year quota on supply but will still be recruiting new suppliers.”

The Union Dairy Company is offering an opening price that equates to $5.75 a kilogram milk solids.