THE region’s leading dairy processor is moving to cut 74 Gippsland-based positions by the end of June as part of an organisation-wide restructure.
Dairy manufacturing market leader Murray Goulburn announced on Tuesday it was moving to cut 12 per cent of its entire workforce due to adverse exposure to a volatile global marketplace.
The company’s Leongatha factory will see 40 positions cut, taking its workforce from 399 to 359, while its Maffra plant will see 15 roles cut from 187 down to 172, while 19 Gippsland based transport drivers will also go.
Seventy-four positions at the company have already been lost through natural attrition, and is seeking to end 59 positions from its head office by September, with the balance to be found at other processing sites across Victoria and Tasmania.
MG managing director Gary Helou said the restructure was a result from a decline in world milk prices due to an increased global supply, while the high Australian dollar further impacted on the trade-exposed industry.
“These are difficult but necessary decisions to ensure that Murray Goulburn can remain competitive. It is in the interests of our suppliers, shareholders, employees, communities and customers that MG remains a strong business into the future.”
The overwhelming majority of milk produced in Gippsland is processed for Asian export as milk powder and in frozen products.
United Dairy Farmers Victoria president Kerry Callow said the job losses were a “bitter pill” for regional Victoria, however was sympathetic to the company’s position.
“This is a tragedy for many country towns who are already struggling with the uncertainty of other food processing plants’ retrenchments and closures,” Ms Callow said.
“The UDV holds MG to its promise to keep all its sites open and commitment to take all suppliers’ milk; ultimately this must mean a stronger and more viable MG, given the cost to regional communities.”
Mr Helou announced in December as the company’s new director, he planned to cut $100 million in operational costs from the company.
In March MG’s Rochester factory ended 64 positions after shutting down its drying operations, the majority of which were found through voluntary redundancies, according to the company.
The company has indicated while it has a June deadline to locate the job cuts, voluntary redundancies will be offered up front, before identifying the roles to be made redundant to achieve the target balance.
Despite occurring during a period of heightened competition in the local dairy processing sector, with some 13 companies vying for the region’s milk supply, Mr Helou said local competition was inconsequential to the restructure, and said the company’s milk supply had only “declined slightly”.
Murray Goulburn currently sources milk from more than 900 Gippsland suppliers, which the company has forecasted to equate to over a billion litres in the coming season.