SAPUTO Dairy Australia has today announced it is permanently closing its plant at Maffra with the loss of dozens of jobs.
And in a “consolidation initiative” which they say is “aimed at enhancing its operational efficiency”, they will also discontinue the long-standing bulk powders production area at Leongatha, in favour of higher value products.
It’s not known exactly how many jobs will be lost at Leongatha, but a union representative described it as "under 20 jobs". However the decision to finally close Maffra, which was only operating at 25 per cent of capacity this year, will impact a significant number of jobs and the town’s economy.
No date has been set for the Maffra closure but a company official said the changes would be made in the first three months of 2023.
“Sadly, it doesn’t come as a great shock but its nonetheless very disappointing,” said Cr Scott Rosetti, a former Mayor of Wellington Shire.
“It’s probably been on the cards for a while but it’s not the news you want to be hearing,” he said.
Paul Bourke at Gippsland Real Estate said that at the peak, the Maffra milk factory would have employed upwards of 200 in its heyday.
“It’s been the lifeblood of the town for many years, so it’s certainly sad to see it go, but many thought it might happen. This is a bit sooner than we thought.
“There will be a loss of jobs, up to about 50 I’d say, but they’ve been handing out redundancies in recent times and those that will lose their jobs are going into an employment market that’s red-hot for staff at the moment,” Mr Bourke said.
“But yes, it’s disappointing and will cause a fair degree of upheaval.”
Here’s the official statement from Saputo.
“After careful consideration of all affected stakeholders, Saputo Dairy Australia (SDA or the Company) announces today that it is undertaking further consolidation initiatives intended to enhance its operational efficiency and strengthen its competitiveness.
“As part of the Optimize and Enhance Operations pillar of Saputo Inc.’s Global Strategic Plan, these initiatives include the intention to permanently close its Maffra facility.
“Additionally, while the sites will remain operational, the Company will streamline activities at two further facilities with the intention to shut down its bulk powders production area located in Leongatha, and close its cheese packaging area at Mil-Lel, South Australia.
“Many of the impacted production and packaging functions at these three facilities will be absorbed or integrated into the Company’s other facilities, increasing capacity utilisation and reducing costs
“Approximately 75 employees will be impacted.
“Site management will work closely with affected employees at the three impacted sites to discuss redeployment and retraining opportunities. Where alternative roles are not available, these employees will be provided with severance and outplacement support.”
Leanne Cutts, President and Chief Operating Officer (International and Europe), Saputo Inc said the changes would be implemented in the first three months of 2023.
"We are presently in discussions," said Ms Cutts, about the likely closure date at Maffra.
"Our focus is on supporting the affected staff," she said, noting that there would be relocation and retraining opportunities provided.
“While a very difficult decision to make, today’s announcement continues our journey towards long-term success for our business in Australia by increasing our efficiency and productivity, and making our business more competitive,” said Ms Cutts
"These strategic steps taken to further streamline our network aim to leverage SDA’s broader manufacturing network capabilities while creating synergies to maximise the return on every litre of milk.”
SDA say they will work closely with its customers to ensure these changes have minimal impact and intends for its loyal consumers to continue enjoying its diverse range of dairy products.
SDA also expects no changes to its valued farmer relationships, with suppliers’ milk continuing to be collected and processed across SDA’s network. These changes will take effect in the first three months of 2023.
Gippsland East MLA Tim Bull, said that while the Maffra community and Saputo staff there would have seen the writing on the wall earlier in the year, as a result of downsizing, it was still disappointing to lose a key local employer.
"It's disappointing to lose those jobs but if it had to happen, those people who lose their jobs are going into a vibrant jobs market at the moment and there would be plenty of opportunities for those looking to work elsewhere."
Mr Bull said that other buildings in the town had been successfully repurposed and he would like to see the present Maffra Saputo site used for another jobs' generating undertaking and he would be speaking to the Wellington Shire and others to address that issue.
On a personal note, Mr Bull said he had contacted Saputo in the past about receiving a briefing when major decisions were being made, in an effort to prepare for any fallout, but once again this had not happened, he told the ABC Country Hour on Wednesday.
United Workers Union Dairy Coordinator (Victoria) Neil Smith expressed concern for the workers at Maffra and Leongatha, but also raised wider concern about the future of the dairy industry in Australia.
"It's been a shock," Mr Smith told the ABC Country Hour today.
But Mr Smith also expressed fears for workers at other plants around Australia as dairy farmers continued to exit the industry due to a lack of positive signals from producers and the government.
"It's a crisis. The input cost to farmers are too high. The supermarkets simply don't pay enough for Australian dairy. It's a massive problem," he said.
Mr Smith went on to say that there had been a major change in the market, in fairly short order, where dairy farmers had been providing too much milk, but now not enough to meet demand, with older dairy farmers exiting the industry and the younger generation unwilling to take it on.
"We've got over 4000 people employed in this industry, most of them in regional areas, so this is a real concern," he said, saying government needed to get involved to secure the supply of Australian milk.
He estimated that "less than 20 jobs" would be impacted at Leongatha of the 75 job losses quoted by Saputo. Other people may be offered relocation to the Leongatha plant.
And, while the issue of job losses and the impact, especially on the Maffra economy, have been the main subjects of discussion in the wake of Saputo's announcement, key suppliers in the Maffra area have also claimed they will no longer be supplying the company as a result of the downsizing.
Job losses 'disappointing' says O'Brien MP
Gippsland South MLA Danny O'Brien described the announcement of job losses at the Leongatha factory and the closure of Maffra is very disappointing news for our region and "our thoughts are with the staff who will lose their jobs".
"I hope that as many as possible can be redeployed internally and continue to put food in the table for their families," M O'Brien said.
"It is never easy to lose jobs in any of our communities but its also true that there are a lot of jobs around at the moment so I am optimistic that anyone made redundant will find work elsewhere.
"We continue to face an uncertain time in the dairy industry and I hope that the good recent seasons and better prices will encourage farmers to stick with an industry that is important to our local economy."
About Saputo Dairy Australia
Saputo Dairy Australia produces, markets and distributes a wide range of high quality dairy products for the domestic and international markets including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients.
"We are the largest dairy processor in Australia. Our products are sold in several countries under well-known brand names such as Caboolture, CHEER™, Cracker Barrel*, Devondale, Great Ocean Road, King Island Dairy, Liddells, Mersey Valley, MG Ingredients, Mil Lel, South Cape, Sungold and Tasmanian Heritage. We are part of Saputo Inc., one of the top ten dairy processors in the world."
