$7 million project to expand milk capacity

A $7 million project to expand milk processing capacity at Fonterra’s Darnum plant is underway.

Darnum is one of seven sites to benefit from Fonterra Australia’s recently announced $165 million capacity investment package.

The $7 million worth of works will increase the Darnum site’s daily milk processing capacity from around 2.2 million litres to more than 2.6 million litres.

The investment at Darnum will go towards removing bottlenecks and improving production systems to deliver better yields.

The works, that are underway, are planned to be completed by the end of this year.

The Darnum plant, which is 51 per cent owned by Chinese company Beingmate, produces nutritional powders used in infant formula and whole, skim and fat-filled milk powders for the domestic and export markets.

Darnum site manager Andrew Nooy said the works would contribute to greater plant efficiencies which in turn will improve yields.

“Every dollar you spend removing bottlenecks and improving your production systems delivers better yields from the milk going through the plant. The aim is not to waste a single drop and we are always looking for ways to improve efficiencies and yields.”

Mr Nooy said Fonterra’s investment to grow capacity and increase efficiencies was another vote of confidence in the Australian dairy industry and sends a clear signal to global customers that demand can be met.

“As well as investing in more capacity, Fonterra Australia is encouraging more farmers to join us as suppliers.

“Our Australian milk pool has grown by 400 million litres this season, and with this new investment we plan to grow our milk further which we expect will come through growth from our existing farmers who wish to grow, coupled with milk from new suppliers joining Fonterra.

“We’re investing in the capacity for additional milk volumes across all of our seven sites so we can meet continued demand in the local and global markets,” Mr Nooy said.

Fonterra Australia managing director Rene Dedoncker said increasing capacity at Darnum also meant the site would need more milk and Fonterra was working hard to secure this.

“We have a clear strategy that is delivering sustainable returns. To create value, we need to invest to stay ahead of the demand curve. These investments support our aim to secure positive returns back to our farmers,” he said.

Member for Eastern Victoria Region, Harriet Shing said this was a huge vote of confidence in the Gippsland dairy industry from Fonterra. “We know local farmers have had some tough times but today’s announcement is a win for them and our local community as a whole.”