Lion plans $40m Perth plant upgrade

20 Jan, 2016 12:15 PM
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Lion Dairy and Drinks managing director Peter West.
Lion Dairy and Drinks managing director Peter West.

National milk processor Lion Dairy and Drinks is to spend $40 million in the next three years on upgrades at its Perth plant to underpin its dairy growth plans in Western Australia.

This investment, accompanied by 30 job cuts from its WA payroll, is promised to "comprehensively modernise" the Bentley processing plant, adding new manufacturing capability and providing more efficient route-to-market services through off-site logistics firm, Linfox.

Lion will also sell surplus land at Bentley to fund the transformation.

The investment comes on top of $1.5m spent at Bentley in the past year and the company's $150m specialty cheese plant expansion in Tasmania, opened last May.

At Bentley improvements will include a new WA distribution centre, installation of one way packaging technology, and a new filling line to expand manufacturing capacity in milk based beverages and boost Lion's white milk processing efficiency.

The upgrade will also help meet growing demand for Lion's blockbuster brands such as Dare iced coffee and support plans to grow the WA brand Masters and its white milk business.

Plans for a significant upgrade to buildings and amenities and new internal roads to reduce vehicle traffic in adjacent residential areas are also on the drawing board.

Lion will consolidate its existing multiple depot footprint to a single new depot on site at Bentley, outsourcing its warehouse operations to trucking company Linfox to improve efficiency in the dairy business.

Managing director, Peter West, confirmed all roles within the logistics area at Bentley would be redundant.

"Any decision resulting in job losses is taken extremely seriously," he said.

"The outsourcing of the warehouse operations is no reflection on the people working in this area - their contribution to our site over many years has been much appreciated.

"This decision is about ensuring we remain a sustainable and viable operator in the WA dairy market today and in the future."

Mr West said the "transformational $40m investment" made clear Lion's intent to compete and grow the WA dairy business.

However, manufacturing services union United Voice WA has blasted the company for focusing on profits at the expense of a third of its Bently plant's workers.

“This is another 33 WA families who will now lose it all, because a multinational conglomerate wants to make more money,” said United Voice assistant secretary Kelly Shay.

“Such an iconic WA brand should be supporting WA families, not cutting their jobs.”

Japanese-owned Lion's wider beer, wine, cheese, juice and dairy beverage business employs more than 7000 people in Australia and New Zealand at 34 sites.

It also own 39 Liquor King retail outlets in NZ.

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FarmOnline
Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media

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Of course Mr Birchnell would sing the praises of Cattle Council and MLA. Compulsory levies
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$1/lt milk's arrival came with a plan to deal with protesting farmers the customer comes 1st
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Let us not forget, especially for MG, that this is a co-operative and should we also claw back