Murray Goulburn to invest $200m to grow business locally and globally

Murray Goulburn Co-operative (MG) has announced its plans to invest $200 million in state-of-the-art dairy food manufacturing facilities for UHT milk, cheese, butter and spreads. The group plans to invest the money over three years and says the investment will make it internationally competitive.

“During the past 10 months we have made good progress towards lowering our cost base and identifying international growth opportunities,” wrote MG Managing Director Gary Helou in a letter to shareholders and suppliers. “We are now entering the next phase of Murray Goulburn’s development that requires significant investment in leading-edge manufacturing facilities that generate higher value products and enable greater innovation as well as cost leadership.”

Helou said the company will focus on global cost leadership and dairy food innovation to grow MG’s presence in global and domestic consumer markets.

MG produces UHT milk at its Leongatha and Edith Creek sites in Victoria and Tasmania respectively. Helou said it has identified strong opportunities for growth of UHT dairy products in Australia, Asia and the Middle East and to realise this potential, MG needs to double its capacity to approximately 500 million litres.

“Liquid milk consumption in Asia and the Middle East is growing at 5-10% per annum,” said Helou. “Demand for premium Australian fresh milk means that MG is ideally placed to leverage its scale advantage across the Asia-Pacific region.”

MG intends to establish UHT facilities incorporating one-step milk processing, a high degree of automation, high-speed lines and a variety of pack formats. “These facilities will allow MG to achieve cost leadership, improve product taste, launch innovative products and enter adjacent categories,” Helou said.

MG also intends to increase its consumer butter capacity to 20,000 t/year and establish a highly automated cheese cut-and-wrap facility to produce more than 60,000 t/year of cheese products. The company’s Koroit plant will house a new butter packaging line.

“These investments will complement and strengthen our ongoing commitment to MG’s high-quality dairy ingredients business portfolio,” said Helou.