Victoria's Kyvalley Dairy Group has announced a new agreement with the a2 Milk Company (Australia) Pty Ltd (a2MC) to extend its long standing supply and processing alliance.
Kyvalley Dairy Group has been a foundation supplier to the a2 Milk Company since 2003, providing about 55 per cent of the a2 raw milk and packing 100 per cent of a2 milk products sold in Victoria, South Australia and Tasmania.
The new alliance between Kyvalley Dairy Group and a2MC includes a long-term supply agreement for the sourcing, processing and packing of a2MC products - and a sale and lease-back arrangement from Kyvalley Dairy Group to a2MC.
The a2MC will fund expansion and upgrading of the group's processing facility in Kyabram, which will be managed by Kyvalley Dairy Group through a lease and revised long-term supply agreement.
The upgrade will benefit both businesses by providing extra capacity and improved facilities to create factory efficiencies and ensure the continued delivery of high quality products to consumers.
Kyvalley Dairy Group chief executive officer, Michelle Sonnenschein, said it was an exciting outcome for the business and provided security for the future - for valued employees and suppliers.
This sentiment was echoed by a2MC Asia Pacific chief executive officer, Peter Nathan.
"We have had a very strong and long-term relationship with the team at Kyvalley Dairy Group," he said.
"This alliance, and our significant investment into the facility in Kyabram, demonstrates our confidence in the a2Milk™ brand, the strength of our partnership with Kyvalley and the economic benefit a2 Milk ™ continues to have for regional Australia."
The new alliance and upgrade of the Kyabram facility - starting in early 2021 - will provide the region with employment opportunities and support dairy farming families with secure long-term supply opportunities.
Kyvalley Dairy Group also operates facilities in Geelong, which will ensure a secure supply chain across Victoria.