Fonterra Opens Multi-million Dollar Milk Plant

18 Sep 2015 --- Fonterra Australia’s state-of-the-art beverages plant was officially opened by Minister for Agriculture and Regional Development, the Hon. Jaala Pulford in Cobden.

The new multi-million dollar beverages plant expands Fonterra’s Cobden plant – the home of Western Star butter – and has created around 50 new jobs, bringing positive flow on effects to the local community and farmers.

The beverages plant will provide Woolworths Select milk across Victoria for the next 10 years.

Fonterra Australia Managing Director Judith Swales spoke to the 50 jobs and cutting-edge technology at today’s event.

“Fresh milk is at the heart of dairy, and the opening of our fresh milk beverages plant is a key milestone that delivers on our strategy, which is about making sure our nutritious dairy foods are on the kitchen table of all Australians and export markets.

“Australia is a strategic market for Fonterra and our Australian milk pool is the Co-op’s largest milk pool outside of New Zealand, combined this makes us the largest dairy exporter in the world. Our Cobden plant is the cornerstone site for our Australian operations and the expansion of the plant created around 50 jobs in south west Victoria, and also provided career opportunities for some of our existing employees.

“The state-of-art plant will process and deliver around 115,000 bottles of fresh milk for Woolworths’ Victorian customers every day. Importantly, we’re processing our milk close to the source, which means it gets from the farmgate to our factory to Victorians’ fridges sooner and fresher,” said Swales.

The plant will offer efficiencies through our supply chain due to its highly automated processing. In an Australian first, it will use one-way-packaging utilising light weight bottle technology negating the need for milk crates across the supply chain.

Benefits of this model include reduced carbon footprint, negating reverse logistics, and will also increase the percentage of recyclable materials and improve water management through the new delivery system versus traditional crate management.

“These flow on effects and efficiencies mean the partnership is win-win-win; a win for Woolworths, a win for Fonterra, and most importantly, a win for our farmers.”

Woolworths Merchandise Manager – Chilled, Ewan Shearer, said the plant is a concrete example of the benefits that new long term milk contracts are bringing to the industry.

“Woolworths is delighted that as a result of this contract Fonterra has the confidence to make a major

Fonterra Co-operative Group

Confidential to Fonterra Co-operative Group Page 2

investment in Victoria which benefits not just the industry but also our customers.

“The new plant will deliver customer benefits like packaging innovations including induction seals that ultimately mean a better product on the supermarket shelf and in the fridge at home.”

The long-term deal means supplying farmers have the confidence to invest in their businesses, knowing their milk has a secure home for the next ten years.

In an earlier statement, Australian Dairy Farmers (ADF) President Noel Campbell said he expected that the benefits of the long-term contract between Fonterra and Woolworths would flow through to the farmers’ bottom line.

“Retail contracts with this sort of longevity provide milk processors with the security and certainty they require to invest in the industry’s capability and growth,” Mr Campbell said.

“The ten year contract also gives Fonterra the option to provide longer-term contracts to their suppliers. Farmers are always more willing to invest on-farm when they have a certain destination for their product.”