March 16, 2011
National Foods is looking to invest $132 million into cheese manufacturing in Tasmania, signalling a major commitment by the company to the Australian dairy industry.
The planned investment will create a modern, market leading, high volume specialty cheese manufacturing facility in Burnie, with significant opportunities for growth and innovation. National Foods is working closely with stakeholders and community partners to ensure the proposed expansion at the site proceeds in alignment with environmental expectations, now and in the future.
The decision to make a significant upgrade at Burnie followed a six month review of the following National Foods cheese manufacturing sites:
- Heidi Farm, Burnie, Kings Meadows and King Island in Tasmania
- Murray Bridge and Jervois in South Australia
- Simpson and Campbellfield in Victoria
- Malanda in Queensland.
The Allansford site did not form part of the review however minor adjustments will occur as National Foods transitions to its new manufacturing platform. National Foods’ Managing Director Andrew Reeves said the National Foods cheese business had evolved through brand and site acquisitions over the past 10 years with little or no manufacturing optimisation. “The review was driven by the need for National Foods to support its market leading brands and develop a long term sustainable business model based on modern and market leading manufacturing practices,” Mr Reeves said
The six month review considered the duplication in the network (both assets and process), the safety and wellbeing of our people, limitations in productivity and growth, innovation, technology and the long-term viability and sustainability of the sites.Capital requirements to meet environmental standards and plant replacement were also key factors considered.
The review concluded that it was not sustainable for National Foods to operate multiple manufacturing sites and that investment in world class manufacturing should be focused. As a result, all specialty cheese manufacture, other than King Island brands, will be consolidated into a single site, preferably to be located in Burnie, Tasmania.
- In South Australia, 103 people will be transitioned to another manufacturer following the sale of the Murray Bridge and Jervois sites to another interested party.
- Over the next three years the Simpson and Campbellfield sites in Victoria will be wound down and closed. This will affect 133 of our people in Victoria.
- The Kings Meadows site in Tasmania will be closed within three years, affecting 40 roles. Operations at Heidi Farm will be transferred to the Burnie site in Tasmania.
- National Foods will continue to manufacture high quality products under the King Island brand on King Island and will invest $12 million to ensure this capability.
- The Malanda site in North Queensland will continue to produce mozzarella cheese in an effort to utilise milk from suppliers in Far North Queensland.
As part of its planned $120 million investment in the Burnie site National Foods intends the site to have a 25,000 tonne cheese making capacity per annum which requires an additional 10,000m2 building expansion. Mr Reeves said the proposed Burnie investment was a major commitment from the company to the Tasmanian dairy industry. “Tasmania’s reputation for clean, green and exceptional environmental standards is a good fit for the future direction of the National Foods strategy to create high quality, sustainable market leading brands. “We’re looking forward to working with the Tasmanian government on ways to enhance Tasmania’s position as the premium state for speciality cheese manufacture and innovation.
“National Foods’ restructure of its cheese business is the key to unlocking further profit and growth potential from the specialty cheese category and our preferred investment in the Burnie site will bring a high level of automation to the plant and realise that potential,” Mr Reeves said. Mr Reeves said that it was unfortunate that sites had been earmarked for closure as a result of the review.
“We did not take these decisions lightly. Our people at these sites have done a great job producing high quality product for many years. It is critical for our long-term viability that we continually review our operation and make sure we are running as efficiently as possible, minimise duplication and optimise use of our resources. “As a result of this review National Foods will be able to deliver an improved and efficient manufacturing platform to support future growth and innovation. It will also enable us to optimise current and new technology,” Mr Reeves said.
Mr Reeves said that National Foods would work closely with its affected people.“Many site closures will not be taking place for two to three years, providing our people as much time as possible to consider their future plans. “We will work closely with our people to fully support them through the process, offering outplacement support and free, confidential counselling for our people and their families through the Employee Assistance Program,” Mr Reeves said.
For more information:
Julia Fraser Suzanne Lewis
Corporate Affairs Manager National Foods
0409 075 308 0467 526 944