Production at the Cororooke site, which manufactures soft cheese and cream products, will be closed down in a phased process over the next year, with the loss of around 130 jobs.
The decision to close the plant followed a complete review by Fonterra Australia of its manufacturing operations in south-west Victoria.
Alongside the Cororooke plant closure, the firm is beginning a three-year program of investment and upgrades at its remaining manufacturing sites in the region.
Maintain market position
“To maintain our leading market positions, compete efficiently on the world stage and continue to deliver a strong milk price to our farmers, we must ensure our manufacturing sites are efficient and capable of handling the growth we anticipate in the future,” said Fonterra Ingredients Australia managing director, Simon Bromell.
“With that in mind, we have reconfirmed plans to invest $20m in site upgrades at Codben and Dennington over the next three years, but we have also had to make the extremely difficult decision to close one site, at Cororooke.”
Including the planned $20m ($16.5m, €12.7m) investment, Fonterra has spent more than $100m ($82.4m, €63.3m) on its manufacturing facilities in Victoria over the last three years.
Bromell added that to keep the 100 year-old Cororooke plant open and operational, major upgrades to meet changing environmental and production standards would be required.
“While our first preference is always to upgrade and maintain our sites, the challenges we face and the barriers to modernising this particular plant mean the most responsible thing to do it close it,” Bromell added.
No farmer impact
Fonterra will continue to operate its remaining nine manufacturing sites in the country, which currently process around 1.7bn litres of milk per year.
The statement from the New Zealand-based dairy co-operative added that there would be no impact on its farmers in the region and that all milk would continue to be collected as normal but would be delivered in future to the firm’s nearby Cobden and Dennington sites for processing.