Kraft and Bega Cheese deal to boost jobs

Posted by James Ferre on 18th December 2008

Bega Cheese and Kraft Foods Australia have reached a multi-million dollar agreement, which will create 150 new jobs. It involves Bega purchasing a factory at Strathmerton, in northern Victoria, with Kraft committing to a 10-year supply agreement.

Under the agreement, Bega Cheese will in turn provide cheese cutting, packaging and processing expertise and capacity for Kraft’s Australian and New Zealand business through a long term supply agreement, while committing to add significant volume to the Strathmerton site from both its existing export business and through new product development.

Bega Cheese Executive Chairman, Barry Irvin, describes the agreement as a “win win” situation for both companies. “The Strathmerton agreement lays the platform for co‐operative growth for both Bega Cheese and Kraft Foods,” he stated. “We are looking forward to operating this globally significant manufacturing facility which adds to our existing capabilities at Bega. It will strengthen both Kraft and Bega Cheese’s positions as leaders with the Australian cheese industry.”

Kraft Foods Managing Director Australia/New Zealand, George Zoghbi, believed the deal allowed both companies to focus on their areas of greatest expertise. “The agreement enables Kraft to focus its expertise on the sales and marketing of cheese products, while benefiting from Bega Cheese’s world class lean manufacturing skills. This agreement with Bega Cheese also reinforces Kraft’s commitment to local sourcing and will only strengthen our growth in the Australian market place,” he said.

Victorian Regional and Rural Development Minister, Jacinta Allan, advised that the alliance of these two companies could result in Strathmerton becoming Australia’s largest processed cheese plant.

“Today’s announcement secures the future of the Strathmerton factory which currently employs 195 workers,” Ms Allan said. “It also provides the Strathmerton community with an economic boost and jobs creation opportunities that will flow on to local workers and families.”

“Bega has shown strong support for the Brumby Government’s … planning for the continued prosperity of the Food Bowl (in the region of northern Victoria),” Ms Allan claimed.

Bega’s Strathmerton factory processes 22,000 tonnes of product a year, which the company plans to increase to 55,000 tonnes in the next five years – 20,000 tonnes will be exported.