Australia’s first fully integrated supply chain for organic milk powder will be centred in Geelong as a result of a GRIIF funding package which lured an organic dairy farming co-operative to the city four years ago.
A joint venture involving Organic Dairy Farmers of Australia, infant formula and milk powder supplier Wattle Health Australia, and Niche Dairy owned by the founder of infant formula canning operation Blend & Pack, is building an Australian-first facility in North Geelong.
A new $55m dedicated organic nutritional dairy powder dryer and a $10 million parallel project focused on organic butter are set to create 60 jobs in the next 12 months, taking Organic Dairy’s workforce in North Geelong to almost 90.
Organic Dairy Farmers Australia, the country’s largest supplier of organic milk, is a 16-year-old co-operative of organic dairy farmers which relocated from Warragul to Geelong four years ago after receiving a GRIIF grant.
“The $600,000 under the GRIIF was the difference between us choosing another site or coming to Geelong,” CEO Stewart Price said.
The co-operative bought a former fish processing plant in North Geelong and has spent about $10 million developing the site to produce organic dairy products under the brand True Organic and to supple partners including five:am, Lemnos Food and Parmalat.
Organic Dairy Farmers of Australia has been building towards its long-term strategy of creating an efficient organic dairy processing plant that will give its members a premium gate price and control over their own destiny through a vertically integrated supply chain.
“Everything we have invested in has always been with the future and the bigger plan of what we are going to do,” Mr Price said.
It started with building a separation and pasteurisation system and from day one the Geelong plant was built with the capacity to receive 80 million litres of milk a year, although it initially processed much less as it had no way of handling the spring spike in milk production.
“That whole world is changed now,” Mr Price said, describing the $65 million expansion and its “spring solution” as a quantum leap forward for organic dairy products.
The spray drying facility will be able to process up to 200,000 litres of organic milk a day, or about 90 per cent of the plant’s milk receivable capacity, with the other 10 per cent involving the separated cream which will be used in “True Organic” retail dairy products such as butter and cheese and bottled cream.
The joint venture, Corio Bay Dairy Group, is 50 per cent owned by the co-op with Wattle Health having 45 per cent and Niche Dairy 5 per cent.
“They bring the equity, we bring the milk,” Mr Price said.
Organic Dairy Farmers of Australia will oversee both sites to create efficiencies in production and control and to minimise costs with the partnership creating a grower-to-market supply chain.
“We have a partner, they have markets, they have the next part of the processing,” Mr Price said.
“It creates a fully integrated supply chain of Australian organic powder, which no one else can lay claim to.”
Organic Dairy chairwoman Kylie Doyle said the co-operative comprised families who were committed to the principles of organic farming and who wanted to control their own destiny.
“Our vision and mission is to support sustainable and intergenerational family farms and deliver a milk price at a premium,” Ms Doyle said.
The co-operative which began in 2002 with 16 farms now has 50 members with more set to go through the three-year conversion process as a result of the Geelong expansion.
The farm gate price for organic milk is forecast at $8.50 for milk solids per kilogram compared to convention farming gate price of $5.95 this financial year.
On Friday Lara MP John Eren announced a $1.95 million Food Source Victoria grant for the expansion.
“It’s fantastic to see a Victorian co-operative creating new products and building on our $1.7 billion dairy export market,” Mr Eren said.
“Victoria’s strong dairy industry benefits from our ability to innovate and collaborate which helps us capitalise on emerging markets.”
As seen in the Geelong Advertiser on Monday October 8th 2018