Australia-based dairy company Murray Goulburn (MG) is partnering with Indonesian health and infant nutrition company Kalbe Nutritionals and US-based Mead Johnson Nutrition (MJN), to set up $300m infant formula processing facility at Koroit in western Victoria, Australia, to increase its supply of nutritional infant powders to Asian markets.
Under the terms of the agreement, while MG will invest in the construction of the plant and look into commissioning of it, MJN will establish a nutritional packaging factory at the site.
On completion, the companies intend to supply the finished products to Asian Pacific region including China.
When combined with MG's existing fully utilised 18,000 tons per annum drying and canning nutritional powders plant in Cobram, this investment is aimed at creating an infant nutrition hub in Victoria.
MG looks to supply its global nutritional customers and the company's own Devondale Natra Start infant formula to key markets.
Through this approach, nutritional powders will be delivered in two stages with the initial installation of 45,000 tons per annum dryer that will be increased to up to 90,000 tons per annum as market demand increases.
MG expects the first phase of the plant to become operational by early 2019.
The construction on the facility is subject to final board approval and receipt of the requisite planning approvals.
The Koroit facility, which is located 300km west of Melbourne, is considered to be the largest production facility in MG's portfolio with an intake of close to 1 billion litres of milk per annum for the production of skim and whole milk powders, along with a range of dairy foods including cheese, butter, cream and infant formula.
The nutrition supply agreement between the companies strengthens the existing supply partnership which has seen MG supply dairy powders for use in Kalbe's range of nutritional products such as infant and children nutrition brands.
Through the latest long-term agreement, MG has pledged to supply and Kalbe has committed to purchase significant minimum annual volumes over time.
Kalbe produces and distributes pharmaceuticals, energy drinks and nutritional products for Indonesian and Asian markets.
MG managing director Gary Helou said: "MG and KALBE have worked closely together in recent years to meet the nutritional powder supply needs of KALBE's leading infant and children nutrition brands and in doing so, we have developed a deep understanding of each other's needs and requirements.
"It is therefore particularly pleasing that KALBE has turned to MG to secure additional supply of quality, Australian nutritional powders for use in their market-leading brands. It also paves the way for further collaboration between our two companies, particularly as MG looks to grow its high quality dairy foods products in Asian markets, including Indonesia.
"Indonesia is an important Asian growth market for dairy foods. It has one of Asia's largest pediatric populations; with approximately one in ten people under the age of 51and this represents a future growth opportunity for MG and our high quality dairy foods products, including infant formula."
The latest investment decision follows MG's $86m spending in the development of its cheese factory in Cobram in Victoria's north and $190m on a milk processing plant in Laverton in Melbourne's west.
Image: Murray Goulburn to supply infant formula products to Indonesia's Kalbe. Photo: Courtesy of tuelekza/FreeDigitalPhotos.net.
