Australian Dairy Farms Group signs processing deal

By Jim Cornall

- Last updated on GMT

Camperdown Dairy already produces a range of dairy products for the Australian market.
Camperdown Dairy already produces a range of dairy products for the Australian market.

Related tags Dairy Milk Dairy australia

Australian Dairy Farms Group subsidiary Camperdown Dairy Company has signed what it says is a ‘significant new contract processing agreement’ with an international food company.

The multi-year contract for the nationally-distributed products is expected to exceed A$30m (US$22.8m) in sales in the first four years of production.

As the 2018-2019 volumes are expected to exceed Camperdown’s current production capacity for this product segment, an expansion project is due to start shortly.

Production is due to commence in early July 2018.

The international specialty dairy manufacturer and brand owner cannot be named because of non-disclosure agreements in place in relation to the marketing launch of the products.

Australian Dairy Farms said the confidentiality agreements are primarily to protect the ‘significant commercial interests and investment of the customer and the retailer in the lead up to market launch.’

Expansion of existing facility

The products, which will be new to the Australian market, are scheduled to be launched in Australia during July/August 2018 through a major Australian retail supermarket chain.

A formal contract was approved and executed by the Australian Dairy Farms Group board following a board meeting on April 20, 2018.

Work on the expansion of the product segment manufacturing capacity will take place within the existing factory. Capital costs for the expansion is budgeted at approximately A$750,000 (US$570,000): the Group has available funds to cover this expansion cost.

Successful manufacturing trials for the product range have been conducted at the Camperdown Dairy Factory at Camperdown, Victoria, over the last two months, with combined production teams of the customer and Camperdown Dairy Company.

The board said the deal is a part of its corporate strategy to progressively move away from its concentration on highly competitive conventional white milk production to high value-added products of its own brands and contract packing of premium brands owned by others.

Related topics Manufacturers Emerging Markets