AS devastating as the news from big milk co-operative Murray Goulburn has been for the communities of northern Victoria and Tasmania this week, it has been confirmed by MG that Leongatha will benefit from the misfortune of others.
In a statement from MG today, the firm has confirmed that some of the processes and lucrative products formerly undertaken at their northern plants will be shifted to Leongatha with the required investment and boost in local workforce.
The news has been cautiously welcomed in Leongatha, although the local business community is acutely aware of the impact the loss of such a key employer would mean for its sister MG towns.
More details as they come to hand.
Here’s what the firm released this week about the closures of its plants:
“It is intended that the Edith Creek facility will be closed by Q2 FY18, the Rochester facility by Q3 FY18 and the MG facility at Kiewa by Q1 FY19. The Rochester and Kiewa closures will occur in a staged manner and are expected to commence in August 2017. These initiatives will ensure that MG has an improved processing footprint going forward. The closures are expected to impact approximately 360 employees. Once completed the closures are expected to deliver an annualised net financial benefit of $40 million to $50 million. MG anticipates a net financial benefit in FY18 from the closures of approximately $15 million. MG expects to spend $60 million of capital expenditure to enable the closures, which will be largely funded by maintenance capital expenditure no longer required at the sites. MG will write-down assets of $99 million (post tax $69 million) and expects to incur cash restructuring costs of approximately $37 million (post tax $26 million). These cash costs predominantly comprise redundancy and entitlement payments to impacted employees.”
Caption: MG’s Chief Executive, Ari Mervis, pictured right with local director Bill Bodman, reinforced the importance of these decisive actions: “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.”