Murray Goulburn plans major expansion in UHT milk
Australia’s largest dairy co-operative, Murray Goulburn Co-operative Co., will invest $19.1 million in its facilities at Leongatha in Victoria, to lift the site’s Ultra High Temperature (UHT) milk manufacturing output by approximately 70 million litres a year.
The investment is part of a planned $200 million investment by the company in ‘leading-edge’ dairy food manufacturing facilities for UHT milk, butter and spreads, and cheese, details of which will be announced in full by mid-2013. The investment plan, announced in August 2012, is an attempt to make the most of potential opportunities the Company has identified to grow sales of its products in markets in Asia and the Middle East.
“The demand for Australian dairy products is growing rapidly. To meet the demand for UHT milk, we realised we had to make the upgrade at Leongatha now,” said Gary Helou, Managing Director of Murray Goulburn. “The Leongatha upgrade will help Murray Goulburn meet immediate demand for UHT milk from world markets, particularly in Asia, while the long term strategy is confirmed. It will also help us to life out supplier-shareholder returns,” he said.
The Leongatha investment will involve the installation of two new leading-edge production lines.
“It will increase our ability to supply growth markets and improve our productivity. The upgrade will also mean new opportunities for employees,” said Mr Helou.
In a quarterly update in February 2013, Murray Goulburn said a strong Australian dollar and increased competition from New Zealand dairy suppliers after a strong New Zealand dairy season, had created a tough market for Australian dairy. However, Murray Goulburn said that strengthening its position in Asian and Middle Eastern markets would “deliver the value add needed to ride over the negative commodity cycles”.
In March 2013, the MG announced that it had confirmed its commitment to the Chinese market by increasing its share in MG Qingdao, its China Infant Formula joint venture, from 51 per cent to 100 per cent.
“This move confirms our commitment to the fast growing Chinese market, where we believe there is enormous potential for growth in the dairy food and nutritions categories, and this is best achieved through 100 per cent ownership of the business,” said Mr Helou at the time.
Work on the Leongatha upgrade will begin in late April, and is expected to be completed by December 2013.