Ninety-eight jobs will be lost in Dennington due to the closure in a move that largely blindsided residents after an expansion of more than $8million was promised earlier this year.
In a statement, Fonterra said the decision was made following a business review which took into account industry changes.
It said the Dennington factory was not viable in a low-milk-pool environment.
‘‘While this is terribly difficult news to share, it is a responsible decision that consolidates our manufacturing in western Victoria, making our three regional Victorian milk processing sites more efficient,’’ Fonterra said.
Stanhope’s plant has expanded dramatically in the past two years, with the goal of doubling the site’s cheese processing capability. Three new milk silos have also been installed.
In August, that goal was achieved — the facility is now capable of producing 80000 metric tonnes of cheese.
‘‘The closure will not impact the Stanhope plant, which was expanded last year to build a second cheese line, commissioned late last year,’’ a Fonterra spokesperson said.
‘‘Currently we’re only running one cheese line, with lower milk volumes meaning that we’re making decisions about how to run our sites as efficiently as we can.
‘‘However, the Stanhope investment well and truly sets us up for the future and gives us the optionality and flexibility to capture future cheese demand.’’
The company said it was doing its best to support Dennington workers who had lost their jobs, and that the move was a responsible reaction to the dairy crisis.
‘‘Fonterra’s immediate focus is on the wellbeing of these people and their families, and providing them the support they need now and in the months ahead,’’ the company said.
‘‘In this current operating environment, it’s more important than ever that we put our farmers’ milk into the highest returning products to ensure we can run a sustainable business that is here for the long-term.’’
