Murray Goulburn milks baby formula boom

Murray Goulburn Co-operative (MG) will construct a $300m infant formula factory in regional Victoria to capitalise on export demand.

The dairy group has entered a strategic partnership with global paediatric nutrition company Mead Johnson Nutrition (MJN) under which MJN will co-locate a nutritional packaging plant on the site at Koroit, 300 km west of Melbourne. Once completed, the parties envisage the facilities will supply finished products for sale within the Asia Pacific region, including China.

MJN has also committed to a supply agreement with MG. A separate supply agreement has been agreed with Indonesia’s leading nutritional company, Kalbe Nutritionals.

The investment at Koroit is a key element of MG’s strategy to shift to more stable and higher value-added dairy foods. When combined with MG’s existing 18,000 tonnes/annum drying and canning nutritional powders plant in Cobram, the investment will create an infant nutrition hub in Victoria, from which MG will supply its global customers and the company’s recently launched Devondale Natra Start infant formula.

The facility is likely to house two 45,000 tonnes/annum dryers, with the investment being delivered in two stages: an initial installation of a 45,000 tonnes/dryer that will be increased to up to 90,000 tonnes/annum as market demand increases. MG expects the first phase of the plant to be operational in early 2019.