This dairy cooperative, 100% owned by Aussie dairy farmers, was established in 1950. According to its website, it has over 2,000 employees, contributes over six billion Australian dollars to the national economy, processes 2.8 billion litres of milk annually – around one-third of Australia’s milk volume – into quality products for the overseas and export markets. And it has a number of important subsidiaries and joint ventures in its homeland and beyond.
But, as I recall, visits to the website left me with the impression that there was not much going on with the products in its domestic Devondale brand, and company news was low-key to say the least. It was something of a sleeping giant; they were keeping any activity under wraps.
Of course, that might be my memory playing tricks. I may be completely wrong. But whatever, the situation has certainly changed in recent months.
The co-op has just signed a 10-year deal with the supermarket group Coles – the group that has often been the target of fierce criticism from the dairy industry in Australia, accused of trying to destroy the industry with its $1/litre milk.
Not only that, Murray Goulburn believes the deal will not affect the business it does with rival supermarket group Woolworths. In fact, in an article in Dairy News Australia, the co-op managing director Gary Helou is reported to be planning to offer Woolworths something similar to the 10-year Coles deal.
The co-op recently announced a $19.1m investment in its Leongatha plant, lifting the site’s UHT manufacturing output by approximately 70 million litres of additional capacity each year. The upgrade is part of Murray Goulburn Co-operative’s planned $200m investment in leading-edge dairy food manufacturing facilities for UHT milk, butter/spreads and cheese announced by Helou last year.
It will help meet increased demand for UHT milk from Australia and Asia.
Murray Goulburn has also just acquired 1.2 million additional shares in Warrnambool Cheese and Butter Factory Company, lifting its shareholding to 14.5%. Industry commentators have suggested the move presages a takeover bid, something that Helou denies: ‘This is a strategic investment and there is no current intention to make a takeover offer, nor do we currently intend to seek Board representation.’
Of course, that comment might be similar to the Premier League football club chairman who says the manager’s job is safe, and then sacks him three days later.
It confirmed its commitment to the Chinese market when it decided to increase its share in MG Qingdao, its China Infant Formula joint venture.
And last September, Devondale unveiled a contemporary new look designed to champion the 2,500 farming families that own the cooperative and the ingenuity at the heart of Australia’s largest dairy company.
The rebrand gets under way with the rollout of a contemporary new logo across the Devondale range, in addition to a raft of new products that celebrate the wonderful world of dairy foods.
The editorial column in the latest issue of Dairy New Australia says that MD Gary Helou has often said that there are too many processors servicing the Australian dairy industry. The column says it’s a safe bet that the 10-year deal with Coles will lead to further rationalisation.
With Fonterra’s performance in Australia reported to be under some pressure in recent weeks, the future is going to be interesting. And there will be no time for dairy giants to be sleeping.
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