MG­fac­tory will stay closed if Sa­puto deal is com­pleted


IT’S of­fi­cial.

If Sa­puto buys out Mur­ray Goul­burn (MG), the Rochester plant will never open its doors again.

While some jobs were saved at the Kiewa plant, Rochester was not so lucky.

The news comes af­ter it was an­nounced that the Kiewa plant would stay open to con­tinue pro­duc­tion on cream cheese. How­ever all other ar­eas of the plant would be shut down.

‘‘Due to a range of com­mer­cial con­sid­er­a­tions, the pro­posed clo­sure of our Kiewa fa­cil­ity has been post­poned,’’ gen­eral man­ager Craig McRae said in a re­lease.

‘‘Cream cheese pro­duc­tion will there­fore con­tinue at Kiewa, with cur­rent op­er­a­tional re­quire­ments main­tained for at least the pe­riod un­til com­ple­tion of the Sa­puto trans­ac­tion.

‘‘Sub­ject to com­ple­tion, the con­tin­ued op­er­a­tion of the Kiewa fa­cil­ity will be a mat­ter for Sa­puto to con­sider.

‘‘In re­sponse to queries, I also would also like to clar­ify that the MG Trad­ing busi­ness is in­cluded in the Sa­puto trans­ac­tion, un­less MG has sold MG Trad­ing prior to com­ple­tion, which it is en­ti­tled to do.

‘‘There is no for­mal sale process cur­rently un­der­way for MG Trad­ing.

‘‘As with Kiewa, the fu­ture of MG Trad­ing will be a mat­ter for Sa­puto to con­sider sub­ject to com­ple­tion of the trans­ac­tion.’’

Sa­puto chief ex­ec­u­tive Lionel Sa­puto Jnr said there were no plans to keep open the Kiewa fac­tory or re­open Rochester if Sa­puto was suc­cess­ful in tak­ing over MG next year, but he left the door ajar if milk was to re­turn to the busi­ness.

“We trust the eval­u­a­tion that the MG man­age­ment has taken,” he said.

“Again, with 1.9 bil­lion litres of milk there isn’t enough milk in the sys­tem to sup­port those plants re­open­ing.

‘‘Un­til such time we come back to a higher level of milk and need in­cre­men­tal ca­pac­ity, I don’t think the plants will open up.”

Mr Sa­puto said there were op­por­tu­ni­ties to drive ef­fi­cien­cies and “shave some costs” in the MG busi­ness, point­ing to “some­thing as sim­ple as lease and leases of space MG may have or per­haps some other ex­penses that may not be nec­es­sary”.

Chair of Rochester Open 4 Busi­ness group Leigh Wil­son said it was im­per­a­tive Sa­puto ex­plored all its op­tions with the fac­tory and the com­mu­nity be­fore mak­ing a de­ci­sion.

“We are hop­ing we will have a dis­cus­sion with Sa­puto in the fu­ture but if they don’t want the site, there are other en­ter­prises who have ex­pressed an in­ter­est and it is un­ac­cept­able for our com­mu­nity for it to sit there idle,” Mr Wil­son said.

Bal­len­della dairy farmer and MG sup­plier Adam Camp­bell said he wasn’t happy the Aus­tralian co-op was be­ing sold.

“I am dis­ap­pointed a good com­pany is now in ru­ins and is be­ing sold off to for­eign own­er­ship — seven years ago un­der Stephen O’Rourke the co-op was in ex­cel­lent con­di­tion and now it has been ru­ined,” Mr Camp­bell said.

He had only taken over the fam­ily farm in Fe­bru­ary and stayed with the fallen gi­ant be­cause he be­lieved in the co-op struc­ture.

“We were con­tracted and we could have got­ten out of it, but I had the men­tal­ity the in­dus­try needed a co-op but what sort of co-op does what MG has, sell with­out any con­sul­ta­tion with its sup­pli­ers, it might as well go.”

Mr Camp­bell said he will be at­tend­ing the sup­plier meet­ing to­mor­row but ac­knowl­edged there was not a lot of choice.

“I fear the deal is done and this is just a road­show with a few pleas­antries and that will be it.

“I am dis­grun­tled, but I also un­der­stand mov­ing for­ward we need a sus­tain­able milk price and if Sa­puto are go­ing to take over and pay that, we don’t have a lot of choice — some­one is go­ing to buy us out in the end.”

Mr Camp­bell said other milk pro­ces­sors seemed to be con­fi­dently in­vest­ing in dairy in­clud­ing Fon­terra with their plant at Stan­hope and ACM with the new fac­tory in Gir­garre and he won­dered how MG’s man­age­ment could get it all so wrong, in such a short pe­riod of time.

“Sa­puto are ob­vi­ously con­fi­dent they can steer this ship out of the rough by tak­ing on all of MG’s li­a­bil­i­ties.”

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