The move follows an operational review, initiated after the acquisition of the Dairy Farmers business in November 2008. It was decided that having four sites producing fresh and longer-life dairy food products was no longer sustainable, and that two should be closed.
Production at a site in Cobden, where long-life flavoured milk is made, will therefore be stopped in December and a factory in Wetherill Park, specialising in yoghurt, is earmarked for closure in March 2012.
Operations director Arthur Murphy explained the decision to close the factories. “When we take into consideration the duplication in our manufacturing operations, Fonterra taking back production of its own Ski yogurt currently being made in Wetherill Park, the environmental impacts and costs of running four sites and the reduced demand for products manufactured at Cobden, the review identified that four sites were not viable in the long-term.”
Because two factories will be closed, National Foods is planning to meet demand by investing $65.5m upgrading its Morwell dairy foods facility in Victoria and its milk processing site in Baulkham Hills, New South Wales. This investment will finance upgrades of existing equipment, installation of new equipment and training.