A $20 million development at Burra Foods is set to create 20 new jobs as the company expands into producing nutritional milk powders for the export market. Burra Foods General Manager Commercial Dale O’Neill said an increased demand for high quality complex products such as infant formula is a driving force behind the expansion plans. “The nutritional aspect of the product is that other ingredients such as vegetable oil and vitamins and minerals are added to the milk,” Mr O’Neill said. “The majority of the products will be for export in particular to South East Asia and China where there is a big demand for the product. “There is a growing market for the import of infant formula, especially in China where they are looking for reliable and safe suppliers to produce that product.” The growing demand from China stems from a distrust from consumers in domestic formula following the 2008 melamine scare. “Where possible, consumers prefer to buy imported products rather than domestic,” Mr O’Neill said. “That has led to an increased export demand because they are quite worried about the reliability and safety of their own milk supply. “Burra Foods has been in operation for more than 20 years and is very well known in the market as a safe and reliable supplier.” Demolition of old buildings along the front of the Station Street factory started last month, and construction of the new facility is expected to start later this month. The first production of the nutritional milk powders is scheduled for early 2014. “We have pulled down the old derelict red brick warehouse and we are going to replace it with a brand new building that will house a wet mix and hydration plant,” Mr O’Neill said. “It will be used to mix the batches of nutritional milk powder and then we will send the batches to our existing spray drier and then pack it into big bulk bags. “The nutritional value product doesn’t only consist of milk ingredients, there are often other ingredients added to give it a high value,” Mr O’Neill said. “This product is approximately one and-a-half to two times the value of commodity based powder. “By creating a higher value product, it means we can pay a higher price for milk at farms and get an increased return for our farmers.” The finished product will be canned off-site. Not only will the expansion create more jobs in the long-term, the local economy is already being boosted with the majority of the services and equipment being sourced from local contractors and suppliers. “The other positive aspect is that the project is being funded by the existing shareholders the Crothers family and ITOCHU. “This is a really strong commitment by them to continue to invest in the business and the Korumburra site,” Mr O’Neill said. “This announcement underpins our strategy of continually improving the value of our product basket and growing the value, not necessarily the volume of milk produced on the site. “These are all good signs for the longer term.” The project will not only see an additional 10,000 tonne of volume produced by the company per annum, it will also increase the output of the spray dryer. “Currently Burra Foods manufactures 50,000 tonne per annum, and this project will add another 10,000 tonne of production,” Mr O’Neill said. “The project is based around utilising the capacity of the spray dryer outside of peak season. “Currently in spring peak the dryer operates at 100 per cent, in autumn and winter it operates at less than 50 per cent of its capacity. “The move to nutritional powder allows us to operate close to capacity all year round.” The expansion plans will also see a reception area and an all-weather inwards goods unloading facility constructed. A new training centre will also be built to upskill staff on producing a higher value product.
AS BURRA Foods continues to expand its Korumburra factory, the company is looking towards a water recovery system to boost their water supplies. While plans are not finalised, General Manager Operations Glenn Falcke said it is an option they are looking at. “We were obviously very concerned about the water shortage issue, but then it started to rain,” Mr Falcke said. “We have come up with some solutions that are not 100 per cent locked in but we are talking about implementing a water recovery system.” With government assistance, Mr Falcke said Burra Foods is hoping to make further use of the company’s water purification system. “Milk is 87 per cent water, so this would be an extra step to recover and reuse the water.” General Manager Commercial Dale O’Neill said while the $20 million project is not contingent on funding from the government, the additional output could not go ahead relying on town water.