The world's largest dairy processor Lactalis has announced that it will close its factory at Echuca, Vic, this year.
The move, which could affect about 74 employees and contractors, came as part of a $85 million reshuffle of the company's operations in Victoria.
While it closes the Echuca factory, Lactalis will expand its operations in Bendigo, Vic, making the plant its only factory within the state.
Lactalis chief executive Mal Carseldine described the move to close Echuca as unfortunate.
"Our long-term plan to meet future growth aspirations was made after a detailed review of our yoghurt and desserts division," he said.
"The plan sees us have one regional hub in Victoria that is fully utilised."
The $85 million investment by Lactalis will be spread over three years.
While mainly directed at expanding the Bendigo factory, there will be investment to support the company's full Victorian supply chain.
"The investment will increase the company's capacity and drive a greater focus on environment, technology, and automation, with better utilisation of existing production lines," Mr Carseldine said.
He said the selection of the Bendigo plant over that in Echuca considered milk-processing capabilities, operating costs and the site layouts.
He said following this analysis, Bendigo was the "most suitable option".
Mr Carseldine said Lactalis was consulting with its Echuca team about the closure decision.
He said the company was discussing how best to support the 74 employees and contractors through the shut down.
The loss of employment in Echuca was not a decision Lactalis took likely, according to Mr Carseldine.
"For some employees there will be opportunities for redeployment to other Lactalis sites and those opportunities will form part of the discussions with individual employees," he said.
"I want to acknowledge the contribution of the Echuca team and the decision is by no means a reflection of their efforts."
Mr Carseldine said the $85 million investment in Victoria was a demonstration of Lactalis's commitment to Australia and "confidence in the dairy industry".
He said the additions to the Bendigo facility would see more jobs, a new production line, and more yoghurt and custard capacity.
Lactalis is the world's largest dairy company and has had a sizable footprint in Australia.
The French-based dairy behemoth grew turnover by 7.3 per cent to $US1.9 billion in 2022, according to Rabobank.
Lactalis had a presence in all states and a big share of the liquid milk market.
It acquired Parmalat in 2011, but only changed the name to Lactalis in Australia in 2019.
