Murray Goulburn, Australia’s largest dairy co-op, has entered a long-term supply agreement with the infant nutrition manufacturer Mead Johnson. As part of the deal, Murray Goulburn will invest an initial sum between €175m and €200m to build a new state-of-the-art milk powder plant at an existing site in western Victoria, Australia.

Murray Goulburn says the investment at its Victoria site represents the “largest investment in nutritional powder capability and capacity made in Australia for a decade.” The co-op group added that when this new investment is combined with its existing facility in Victoria, a drying and canning powders plant with 18,000t capacity, Murray Goulburn will have a sector-leading infant nutrition hub in Victoria.

Investment

The dairy co-op says investment in the new facility will take place in two stages. The first phase would see a single milk powder dryer with a 45,000t per annum capacity installed and operational by 2019. The second phase would then see a second dryer, also with a 45,000t per annum capacity, installed at a later date as demand dictated.

Each of these new milk powder dryers will require a milk supply of around 250m litres. Murray Goulburn is Australia’s largest dairy processor, collecting in excess of 3.6bn litres annually, or 37% of the Australian milk pool, from its farmer suppliers.

The dairy co-op recorded revenues of €1.95bn in 2015, with more than two-fifths of its sales coming from export markets, primarily Asia and the Middle East. Murray Goulburn says the bulk of product from the planned new facility will supply sales markets within the Asia Pacific region, including China.