The investment, partially funded by the Victorian government, marks the company's largest expansion project in six years, which it said is "further sign of our confidence in the industry and our ability to succeed in the category".
Burra plans to use the new factory to make changes to its production of milk powder, from bulk 25kg bags to 400g and 800g cans for consumers, in order to make them suitable for export to overseas markets, including China.
This will also facilitate increased production of its other powdered milk products, such as those for adults, students, and expectant mothers, as well as its high-protein skim and full-cream milk.
The firm said in a statement to the press that this investment will give it direct export access to China for its tins of formula, eliminating the inconvenience of canning and labelling its products offshore.
International dairy firm Inner Mongolia Fuyuan Farming Co. (part of mainland Chinese manufacturer and distributor Mengniu Dairy) is a majority shareholder in Burra Foods.
Expansion equals employment
Apart from blending and canning equipment, the plant will have warehouse facilities and hire 39 staff members for construction work, which is scheduled to begin in the first quarter of next year and be completed by late 2019.
After Murray Goulburn's announcement last month that 50 employees would be relieved of their positions at its Leongatha factory, Victoria's agriculture minister Jaala Pulford is confident the jobs created by Burra's new plant will provide new employment opportunities to the former Murray Goulburn workers.
She told Australian media: "This has been a difficult time for many people, with the Murray Goulburn price shock and redundancies. It's nice to share some positive news and have confidence about our dairy industry's future."
Harriet Shing, Labour member of the Victorian Legislative Council, said, "This is a really important investment in the Gippsland dairy industry that will provide jobs and economic returns in a sector that has done it tough over the last 18 months."