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Devondale Murray Goulburn to invest AU$127m in 'dairy future'

By Mark Astley+

05-May-2014

Devondale Murray Goulburn to invest AU$127m in 'dairy future'

Australian cooperative Devondale Murray Goulburn plans to plough an additional AU$127m (US$118m, €85m) into its "dairy future" with investments in cheese, infant formula and dairy beverages.

Devondale Murray Goulburn, Australia’s largest dairy cooperative, announced plans late last week for three separate investments at existing sites in Victoria and Tasmania over the next 12 to 18 months.

The largest, the construction of a “world class” cheese cutting and wrapping facility at its Cobram plant in Victoria, will set Devondale Murray Goulburn back AU$74m (US$79m, €49m).

An investment of AU$38m (US$35m, €25m) will be made across the coop's Cobram and Koroit facilities to increase the production of nutritionals to meet ever-growing demand for infant nutrition products, and a further AU$14m (US$13m, €9.5m) will be ploughed into the commission and installation of a filling line to "commercialize a range of dairy beverage products for consumer markets in Australia and Asia."

"Investing in the future"

On the back of these and previous investments, Devondale Murray Goulburn believes it can increase its farm gate milk price by AU$1 per kg of milk solids by 2017.

"We are investing in the future of Devondale Murray Goulburn to deliver high farm gate returns, as we strive to navigate a new path to meet and serve the growing needs of international consumers and customers for Australian made dairy foods," said Devondale Murray Goulburn managing director, Gary Helou in a statement.

"We are building a better connection with key markets to become the first choice in dairy foods and investing in the future of the Australian dairy industry with the aim of returning it to profitability and growth, ensuring our relevance in the global market."

Asian demand

Devondale Murray Goulburn, owned by 2,500 milk suppliers, has in recent years invested heavily in an effort to meet growing demand from Asia.

In August 2012, the processor revealed plans to spend around AU$200m (US$185m, €135m) over a three-year period to expand and update its manufacturing capabilities. It said at the time that these investments would better equip it to compete in Australia and at an international level in Asia and the Middle East.

Devondale Murray Goulburn's last major spend was in April 2013, when it unveiled plans for a AU$19m (US$17.5m, €13m) expansion of its UHT milk processing capabilities.

An annual UHT output increase of approximately 70m litres as a result of the investment would leave Devondale Murray Goulburn better prepared to meet increasing demand from Asia for shelf-stable milk, Helou said at the time.

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