AN animal nutrition company will buy Dennington's dairy factory, initially creating up to 30 new jobs.
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Australian-owned ProviCo has signed a sale agreement to buy the manufacturing site for an undisclosed sum from Fonterra, with the sale set to be completed by April 22.
The pending sale has ended months of speculation about the future of the iconic site, after Fonterra closed the doors on the 110-year-old milk factory in November last year, leading to the loss of about 90 jobs.
ProviCo will use the site to manufacture a fortified milk product, mixed with vitamins and medication used in the rearing of infant animals including calves as well as horses alpacas, sheep, goats and pigs.
ProviCo owner and managing director Andrew Paterson said he began discussions to buy the site in September. The factory is set to become the biggest of the business' sites, with another factory in Melbourne's Laverton.
"We will go from (manufacturing) on a dry basis to being able to increase production and do it in a spray dryer," Mr Paterson told The Standard.
He said the business would look to initially employ between 20 and 30 new staff at the site.
"It could be up to 50 in the future," Mr Paterson said.
"There is a lot of ground swell and support from Dennington, it's been part of the fabric of the community for over 100 years. Being able to harness that good will and enthusiasm and harness the people who have a vested interest in its success is important to us."
Mr Paterson would not reveal the site's sale price, but believed it would have cost the company $100 million to build a new factory of a similar size. His family bought ProviCo in 2018.
"While the site is an old site, it has modern automation, and spray drying capabilities," he said.
"It was built by Nestle to be a nutrition plant, its ability to handle a range of oils, milk powders, and milks suits us."
Mr Paterson said the company also had plans to strike partnerships with other businesses to use some of the 35-hectare site for storage and distribution.
"Where it makes sense we will partner with people to make use of the full facility. It has ability to serve to a broader industry rather than just one company," he said.
Fonterra Australia managing director René Dedoncker said the company had worked with potential buyers to find a "commercially viable and sustainable future for the site".
The dairy giant shut the site due to a declining milk pool that Fonterra said led to it under utilising the ageing facilities.
"We're pleased to be selling the factory to ProviCo with all of its operational capabilities and assets intact," Mr Dedoncker said.
"The sale creates a new chapter for the factory, which has been an important part of the Dennington community for more than 100 years."
Warrnambool City Council mayor Tony Herbert said the sale was "fantastic" for the city and the region's agricultural sector.
"It's a fantastic sign for the city and region that these types of sites have been snapped up relatively quickly," Cr Herbert said.
"It's really carrying on the tradition of being a major agricultural industry player."
South West Coast MP Roma Britnell said the sale was "the dawning of a new era" for the factory that "cements the south-west as the powerhouse of Victoria's food and fiber industries".
"That production will continue; but instead of producing products for human consumption, it will now produce high quality products for animals," Ms Britnell said.
"This announcement is good news for local jobs, for local manufacturing and for confidence in the local dairy and agricultural industries."
As part of the sale agreement, ProviCo will also take over the responsibility of the Dennington memorabilia hall and its content.
Dennington Community Association president John Harris said the Dennington community could breathe a sigh of relief.
"I think that 30 salaries on a weekly basis is a long way better than none being spent in the Warrnambool community," Mr Harris said.
"It's really only been closed for five months from when the new people take over."
Association member David Kelson said he was pleased the historic collection would remain.
"The new company is a good fit because there's not enough milk to start it up as a milk manufacturing plant," Mr Kelson added.
But the Dennington church and hall, used by at least 20 groups, also on Fonterra land opposite the factory, is not included in the sale.
Warrambool City Council is in discussions with Fonterra about the future of that site.
Cr Herbert said the council was assessing the site's condition.
"It's just about wanting to be informed about what the potential ongoing costs could be of something like that," he said.
"It's very highly used. We have to make sure we house all these groups safely."
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