UPDATE 5pm: Corangamite Shire mayor Jo Beard says the announcement is “fantastic news”.
“It shows a great futuristic approach by Fonterra,” Cr Beard said.
“It is providing security for its future.
“Any investment is always welcome, but to that degree – it is a positive sign.”
Cr Beard said the expansion was great for local farmers who supplied the factories.
“From a regional perspective it is very positive that Fonterra sees Victoria as the heart of dairy,” she said.
UPDATE 4.35pm: Tyrendarra dairy farmer and Fonterra supplier Bruce Knowles has welcomed the announcement of a huge expansion at the company’s Cobden and Dennington factories.
“It’s really good to see this for the industry," he said.
“It’s great to see we have companies that have confidence in the industry. This investment to increase capacity in our region has to be great for the region.”
Mr Knowles said for every dollar spent in the dairy industry, it created another $4 to be spent elsewhere.
He milks 1400 cows at his family-operated farm, with sons Marcus and Kerry.
“The fact Fonterra is investing across the board goes to show there is confidence,” he said. “It also looks like they are trying to build as surplus amount.”
UPDATE 11.34am: Member for South West Coast Roma Britnell has welcomed Fonterra’s $8.6 million
investment at its Dennington factory and $13.5 million investment at Cobden.
Mrs Britnell said it was a strong sign there was confidence and demand for the high quality milk the region produced.
“The western Victorian dairy industry employs 6800 people on farm and 3500 in
manufacturing – re-injecting $286 million back into the community,” Mrs Britnell said.
“The importance of this
industry to our regional economy cannot be downplayed.”
UPDATE 10.50am: State government Minister for Industry and Employment Ben Carroll said the investment cemented Victoria as Australia’s jobs and manufacturing powerhouse.
“This is a huge vote of confidence in our dairy industry from Fonterra, a world leader in Australia’s $2 billion consumer cheese industry,” he said.
“Through peaks and troughs, we’ve supported our hardworking dairy farmers and will continue to invest in projects that help the industry continue to innovate and grow.”
UPGRADES to the Cobden site include the installation of robotic palletisers as well as improvements to the butter plant which will boost its capacity and improve product yields.
Dennington site improvements will include a new 25kg packing line for nutritional powders.
Fonterra Australia regional operations manager Kevin Brown said dairy demand was positive and the company needed to keep investing ahead of the demand curve.
He said both sites had turned in great performance during the peak production period in October and November, making the most of milk collection from our farmers.
“Farmers have had great conditions for production and they have been making the most of them,” he said.
“They’ve put in the hard work to fill the vats and now we need to turn the milk into great dairy foods for the domestic and export markets.”
Cobden and Dennington are part of the plan to grow production across Fonterra’s seven Australian sites by growing milk supply, which it expects will come through growth from existing farmers, coupled with milk from new suppliers.
Cobden is Fonterra Australia’s largest site producing butter and spreads, milk, milk powders and cream.
Dennington produces a range of milk powders for the domestic and export market.
The sites employ more than 400 people.
Managing director René Dedoncker said customers wanted trusted supply options out of Australia, especially for products like cheese, whey and nutritional powders which are in high demand.
“We have a clear strategy that is delivering sustainable returns,” he said.
“To create value, we need to invest to stay ahead of the demand curve. These investments support our aim to secure positive returns back to our farmers on both sides of the Tasman.”
He said Fonterra Australia would play to its strengths in cheese, whey, nutritionals, and butter, increasing production capacity to meet rising domestic and global demand, but filling its expanded capacity would mean securing more supply.
In total the capacity investments will create around 36 jobs, in addition to generating construction work during the development phase.
Mr Dedoncker said more capacity needs more milk and Fonterra Australia is working hard to secure this.
“Our Australian milk pool has grown by 400 million litres this season, and with this new investment we plan to grow our milk further which we expect will come through growth from our existing farmers who wish to grow, coupled with milk from new suppliers joining Fonterra,” he said.
Fonterra collects two billion litres in Victoria and Tasmania, which has grown by around 400 million litres this season. An additional $8 million has been invested in 14 truck and trailer units which will be manned by an additional 15 drivers across its milk collection regions in Victoria and Tasmania.
EARLIER: Fonterra Australia has announced more than $165 million in capital expenditure at Victorian and Tasmanian sites in a move to increase capacity and meet unique demand opportunities for dairy.
The new expansion includes:
- $13.5 million for projects at Cobden and another AU$8.6 million at Dennington.
- $125 million expansion at Fonterra Australia’s flagship Stanhope cheese facility in northern Victoria which will double the size of the cheese plant
- $12 million investment in Tasmania, which includes expansion to its Wynyard cheese plant and an increase in lactose processing capacity at Spreyton
- A further $7 million expansion at the Darnum nutritionals plant in Gippsland as well as the installation of two robotic palletisers in Bayswater in eastern Victoria to improve efficiency.
MORE TO COME.