Burra chief executive Grant Crothers said the company would build an infant formula blending, canning and packing line in the town. The company would be expanding its range from the 25kilogram bulk powder to include 400 and 800 gram tins.
“Led by changing regulations in the Chinese market, the nutritional milk powder category has been volatile in recent times but with persistence and lots of hard work, we have successfully carved out a sustainable niche and built confidence around the future,” Mr Crothers said.
“The $24.5 million initiative to build blending and canning capability on site is further commitment to South Gippsland and our most significant expansion initiative since 2011.
“It heralds the introduction of new skills and will enable Burra to deliver ‘consumer ready’ canned products.”
Mr Crothers said it was anticipated it would be possible to start site works in the first quarter of 2018. Completion was scheduled for late 2019 and commissioning during 2020, subject to regulatory approvals.
Agriculture Minister Jaala Pulford said the expansion would allow Burra Foods to export formula direct to the Chinese market, removing the need to can and label offshore
That would increase profits and help maintain Victoria’s dairy industry position as a major global exporter.
“This is exactly the news the dairy industry in South Gippsland needs to hear. We welcome this huge investment from Burra Foods and are proud to play our part in helping create 39 new jobs.”
“This has been a difficult time for many people with the Murray Goulburn (MG) milk price shock and redundancies.
“It’s nice to share some positive news and have confidence about our dairy industry’s future.”
The project would also enable increased production of a range of powdered milk products, including adult, student and pregnancy powders, as well as high protein skim and full cream milk, which will maximise the revenue and economy of scale from the existing manufacturing equipment.
The $24.5 million project comprises the following:
- A new building to house the upgraded canning and repacking lines
- Plant and equipment for powder handling and blending
- Utility upgrades and external infrastructure
Ms Pulford said the project would increase profits from exports, as it became further incorporated into a global supply chain, leading to the potential for better milk pricing for dairy farmers and suppliers.
She said the government’s assistance with getting the project off the ground followed Murray Goulburn’s recent announcement to cut more than 50 jobs from its Leongatha plant.
The new jobs would be well suited to employees made redundant by MG.