UPDATE: More than 130 people will lose their jobs when Murray Goulburn’s Kiewa plant closes.
The company said 135 employees would be out of work as a result of the decision announced on Tuesday morning.
Kiewa’s factory is the worst hit of the three plants to shut down, with 105 people to lose their jobs at Rochester and 120 at Edith Creek in Tasmania.
Murray Goulburn chief executive Ari Mervis said it was a difficult outcome to reach.
“At MG we are acutely aware of the impact that our decisions will have on our various stakeholders, including the communities in which we operate,’’ he said.
“We are committed to ensuring that we provide our affected employees with appropriate levels of support and the recognition that they deserve during this period of transition.’’
Mr Mervis said the company would would provide career transition and redeployment services to employees.
He said it would also work with federal and relevant state governments to leverage existing programs.
“These have been difficult decisions to make, however they are necessary steps on the journey to ensure the future strength and competitiveness of Murray Goulburn,’’ he said.
“A strong MG is of fundamental importance to the Australian dairy industry and these decisions are necessary to lay the foundation for the future.”
Member for Indi Cathy McGowan said she was shocked and disappointed at the decision by Murray Goulburn.
“This is an incredibly disappointing decision. It is a terrible blow for Kiewa and the surrounding community, as well as for manufacturing in the region,” she said.
Ms McGowan said that the announcement was an enormous test of the resilience of dairy farmers in the North East.
“Farmers, business and local government have shown great calm and intelligent thinking on how to bring the industry to its potential throughout the ongoing dairy crisis,” she said.
EARLIER: Murray Goulburn will close its manufacturing facility at Kiewa.
Along with two other plants at Edith Creek and Rochester, the closures are set to impact 360 employees.
In 2012, there were 200 permanent and casual employees at the Kiewa plant.
Murray Goulburn announced the decisions this morning as a result of its asset and footprint review undertaken in recent months.
A media release from the co-operative on Tuesday said the decision to close three plans was “an appropriate response to reduced milk intake across the network”.
The Rochester and Kiewa closures will occur in a staged manner, and are expected to commence in August.
The closure at Kiewa is expected to be complete by the first quarter of financial year 2019.
MG scraps contentious farmer repayment scheme
Financially-stretched Murray Goulburn Co-operative has buckled under the weight of bad publicity and dairy industry pressure, abandoning its controversial milk price repayment program.
The decision will, in part, be paid for by three dairy factory closures, including one at Kiewa.
All future farmer repayments to the co-op due to be made under the Milk Supply Support Program will be forgiven.
The vexed program was introduced a year ago to claw back over-payments to farmer suppliers after depressed international prices and an unexpectedly high exchange rate forced MG’s contentious mid-season cuts to farmgate payments.
The MSSP, which is temporarily on hold at present, was to recommence from July.
MG will also make a payment to continuing and retired suppliers who made MSSP contributions between July and September last year, and to any suppliers who recommence supplying milk to MG by 31 July 2017.
The dairy co-op has paid dearly for its farmgate payment cuts and the MSSP claw back program, with a big exodus of farmer suppliers from its ranks in the past year.
The company said the decision to revoke the claw back plan was taken in recognition of the unintended impact the MSSP had on the co-op, its farmer suppliers and the industry.