AUSTRALIA'S biggest dairy business is getting bigger by the month and is thirsty for more milk to feed expanding food service and retail markets at home and overseas.
Underpinned by its bold move into the fresh milk market in NSW and Victoria last year and a special share trust float in July to create a $500 million capital pool to fund new factories and new product initiatives, Murray Goulburn (MG) has grown its ready-to-consume dairy foods business almost a third in 12 months, also riding through a global price slump.
The Victorian-based farmer co-operative which became a mainstream player in NSW in 2013 also increased its milk intake 5.5 per cent to 3.6 billion litres last year - well ahead of the 3.8pc industry growth average.
While international milk commodity prices tumbled 30pc in the past year as a dairy product stockpile weighed on markets, particularly in China, the business behind the Devondale brand paid its third highest ever farmgate price for milk in 2014-15 in a deliberate move to encourage its suppliers in four states to hold their nerve and keep milking more cows. It is also in the throes of a $74m expansion of its consumer cheese output at Cobram on the Victoria-NSW border and next year is set to start spending up to $190m on a new dairy beverages plant largely to produce ultra high temperature (UHT) treated products for Asia.
An even bigger construction project, worth up to $300m at Koroit in the Western District, is planned to start next year, too, to lift production of premium-value nutritional powder products by 63,000 tonnes. "We're firing on all cylinders," said managing director Gary Helou, who also spent another $4.8m expanding the company's Tasmanian operations last week. MG now takes full ownership of the Tasmanian Dairy Products milk processing business it established four years ago in partnership with Japanese conglomerate Mitsubishi Corporation.
"We want to grow, and growth starts with plenty of farmgate production, and giving farmers the confidence to keep up their production capacity," he said.
That farm sector confidence received a big boost, particularly in NSW, when MG committed to building two new highly efficient milk processing plants in Sydney and Melbourne.
