Saputo Dairy Australia is seeking a buyer for its iconic King Island Dairy, as part of a strategic review of the business.
SDA has announced it's undertaking the review as part of its Optimise and Enhance Operations pillar of its global strategic plan.
The company recently announced it was intending to reduce the number of its Australian plants to five.
But as part of the plan, SDA has also announced its spending an additional $27 million towards improvement projects, across its Victorian and Tasmanian sites.
"In making these investments and strategic decisions, we remain focused on maximising our return for every litre of milk to further enhance SDA's position as a high-quality, low-cost processor in Australia," Saputo International and Europe president and chief operating officer Leanne Cutts said.
"As King Island Dairy's historic roots are deeply embedded in the region, we hope to find a buyer for the facility to ensure the continued success of its renowned specialty cheese products.
"We recognise the potential impact any decision may have on the King Island community, especially our employees and dairy farmers, and we are committed to thoughtfully considering all possible scenarios before any decisions are made."
SDA intended to keep the King Island operations running at regular capacity, while it assessed possible future scenarios to maximise value for the business, she said.
Advisors MA Moelis Australia would help SDA carry out the review, which would consider a range of strategic, commercial and financial alternatives, including a potential sale to a third party.
About 63 employees work at the facility.
A further $27m would be spent on Victorian and Tasmanian factories to enhance the company's network efficiency and capability, and reduce its operating costs.
That included $8m on improving climate, water and waste performance.
Ms Cutts said the announcement built on SDA's previously confirmed consolidation initiatives that aimed to align its manufacturing footprint with current and future expected milk intake.
That was already delivering higher utilisation through Saputo's facilities, while increasing efficiency and reducing operating costs, she said.
Saputo is currently awaiting regulatory approval to sell two of its factories to Coles.
"Once completed, this strategic review of King Island Dairy will conclude our current challenge to strengthen our competitiveness by proactively adapting our manufacturing footprint to align with the changed dairy industry landscape and deliver on our vision for long-term success in Australia," Ms Cutts said.
