Decisions have been made about the dairy processing plant at Maffra, in south-east Victoria, that formed part of the sale of Murray Goulburn's assets to Saputo Dairy Australia more than five years ago.
The Maffra plant will be divested of assets that can be used elsewhere, then the property will be sold.
Saputo Dairy Australia CEO Lino Saputo Jr confirmed the future of the Maffra plant in an interview with Dairy News Australia on February 16.
Saputo is concentrating on manufacturing high-value dairy products based on consumer and customer demand, which is shaping the future focus for the company’s Australian assets.
In addressing the issue of what to do with the Maffra plant, Mr Saputo indicated he would be investing in expanding existing production facilities, rather than building new green site factories.
“Australia already has too much steel in the dairy industry,” Mr Saputo said.
Instead, he said, the company was investing $20 million to expand the Smithton processing facility in Tasmania, to produce frozen natural cream cheese — a high-value product sought by the food service sector.
Frozen natural cream cheese was one of the Saputo products manufactured at Maffra.
“Saputo is committed to the Australian market and is investing in products that give a high rate of return for every litre of milk,” Mr Saputo said.
“It’s important to us to have the supply and processing network, but we also have to make some tough decisions about where to invest.
“Tasmania is a great dairy producing region, and there’s enough supply of raw material to value our investment in Smithton.
“We’ll continue to manufacture low-value products like powdered milk, and focus on increasing our supply of high margin value products for our domestic and export market.”
The silos and other equipment at Maffra will be used in other facilities. Among the facilities likely to benefit from further investment are those at Cobram, Smithton, Kiewa and Allansford.
“A number of our plants that are currently set up for us to invest in offer a great platform for expansion,” Mr Saputo said.
“Cobram, Allansford, Smithton and Kiewa are some of these assets which allow us to invest for expansion. Kiewa has a great platform for producing yoghurt.
“The first priority at Maffra is to extract the value equipment, moving them to other plants over time.
“The silos, pasteurisers and separators can all be used in other facilities.
“Once we’ve taken the value out of the Maffra site, we’re considering selling the site.”
Dairy News Australia understands the contract of sale between Murray Goulburn and Saputo Inc included a clause that prevented the Maffra asset from being disposed of until early 2023. That time period has now concluded.