Murray Goulburn Co-operative says it is closely monitoring its milk supply levels and trying to optimise factory efficiencies in the face of an exodus of milk suppliers.
The company has reported a 21 per cent reduction in milk intake last financial year, compared to 2016.
“We haven’t made any decisions, or come to any conclusions, regarding any of our factories,” the company said in a prepared statement.
“We do not intend to mothball assets for the sake of it and will be looking at everything on a commercial basis.”
Murray Goulburn has already decided to close three factories at Rochester, Kiewa and in Tasmania.
“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,” the company said.
“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. We are not focused on the size of MG, but our 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.
“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.
“The commercial review we are currently progressing (as part of the strategic review) is looking at milk allocation in individual product lines and sales channels, to ensure that sufficient returns are being made.”
Murray Goulburn issued the statement following supplier meetings at Kiewa, Cobram, Heywood, Koroit, Cobden, Maffra, Leongatha, Cohuna and Rochester.