Murray Goulburn
Co-Operative Co.
Limited
ABN 23 004 277 089
3 February 2010
Media Release
Murray Goulburn announces drought-related site closure
After eight years of drought, Murray Goulburn Co-Operative (MGC) today announced the closure of
its Leitchville cheese-making operations.
“While the Co-operative continues to have confidence in the future of the northern Victorian and
southern Riverina dairy industries with the region still providing about 20 per cent of national milk
production, the decline in milk volumes since 2002 has led us to the very tough decision to cease
operations at Leitchville,” Managing Director Stephen O’Rourke said.
“Milk production across the northern Victorian and southern Riverina region has fallen from 3 billion
litres in 2001/02 to a forecast 1.75 billion litres for 2009/10. Consequently Murray Goulburn can no
longer viably continue operation across four northern Victorian milk processing sites and the
Leitchville closure was unavoidable.
“The decision to implement the site closure came after an analysis of milk supply forecasts and
operational factors at the Leitchville site,” Mr O’Rourke said.
Approximately 80 workers will be affected by the closure and the Co-operative is providing
redeployment opportunities at other MGC sites, retraining and outplacement services with the
support of the Victorian Government.
MGC will continue to employ approximately 2,400 people, most in rural and regional Australia. This
will include relocated employees from Leitchville.
Mr O’Rourke said that the decision was tough as it impacts on MGC people who have worked hard
for the Co-operative and in some cases the previous owner of the facility - Kraft Foods.
“Unfortunately the closure was unavoidable given the relentless dry conditions impacting on milk
supply in the region.”
“All employees unable to be redeployed in the Murray Goulburn business will receive
their full
entitlements including severance pay. This is in addition to financial counselling, retraining and
outplacement services which will be provided by the Co-operative in conjunction with the Victorian
Government,” Mr O’Rourke explained.
Other Leitchville-based services – milk transport and field services will continue as normal.
Mr O’Rourke said that MGC’s success is critical to the future of the Australian dairy industry as the
Co-operative passes all returns from the market to its farmer-shareholders and therefore takes the
leading role in the establishment of farmgate milk prices.
“The decision was necessary to ensure that the long-term interests of Murray Goulburn’s supplier-
shareholders are protected and that the Co-operative continues to serve the Australian dairy industry
and its customers worldwide. The decision was also necessary to ensure that Murray Goulburn's
operations in northern Victoria remain efficient and competitive into the future.”
Milk from supplier-shareholders in the region will continue to be collected as usual with MGC's
operations continuing at Cobram, Rochester and Kiewa in northern Victoria. The Co-operative’s other
sites in Leongatha, Maffra, Koroit, Edith Creek, Laverton and Footscray will also continue operations
as normal.
Despite the fall in national milk supply and its impact on all dairy companies, MGC
has grown a
strong business that now includes a balance of retail and ingredients, export and domestic sales.
140 Dawson Street Brunswick Victoria 3056
PO Box 4307 Melbourne 3001 Australia
Telephone (03) 9389 6400
Facsimile (03) 9387 5741
Mr O’Rourke said that the Leitchville announcement would not impact MGC's capacity to deliver to its
customers and that he was confident that strategies for growth in retail and value-added ingredients
will deliver sustainable farmgate returns into the future with MGC's farmer-shareholders receiving the
benefits of all market returns.
“Murray Goulburn is financially very strong and well positioned to deal with the cost impacts of the
site-closure.
“Murray Goulburn is working to minimize the employment impact on the local economy with the
support of the
Victorian Government. This includes looking at ways of retaining jobs in the district
through investment on farm and in future market opportunities,” Mr O’Rourke said.
Ends
Media contacts:
Angus Urquhart / Jo Lynch
Hintons
Tel: 03 9600 1979
Mob: 0402 575 684 / 0411 208 101
MGC contact:
Robert Poole
General Manager Industry and Government Affairs
Tel: 03 9385 6747
Mob: 0408 057 073
NEWS 
