No guarantees for remaining factories

By Vivienne Duck

THE fate of further Murray Goulburn factories closing is up in the air as the company tries to optimise factory efficiencies in the face of an exodus of milk suppliers.

The company reported a 21 per cent reduction in milk intake last financial year.

In a prepared statement, following supplier meetings at key areas including Rochester, the company said they haven’t made any decisions.

“We haven’t made any decisions, or come to any conclusions, regarding any of our factories,” the statement said.

“We do not intend to mothball assets for the sake of it and will be looking at everything on a commercial basis.”

Following the announcement of the closure of the sites at Rochester, Edith Creek and Kiewa, the co-op’s performance has remained “below expectations”.

“We are undertaking a strategic review of MG’s strategy and corporate structure as a fundamental next step to strengthen the business for the future,” the statement said.

“In addition to the intended closure of three processing sites, we have a business improvement program under way to optimise efficiency across MG’s cost base relative to milk intake.

“Despite the loss of milk, MG remains one of Australia’s largest dairy processors and has a leading dairy foods business with good market share in key dairy categories both domestically and in a number of international markets.

“Scale is not an end in itself — there are numerous small processors which are very profitable.”

The company said they are not focused on the size of MG, but their efficiency and viability.

“You can be a small, efficient processor and you can deliver very good farm gate milk prices to your suppliers, you can also be large and inefficient,” the statement said.

“We are working with our commercial partners to minimise the impact of lower milk intake.

“MG will discontinue a number of low returning product lines as a result of the intended staged closure of three processing sites.”