Brownes helps Lactanz

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Jenne BrammerCountryman
Brownes Dairy chief executive Tony Girgis.
Camera IconBrownes Dairy chief executive Tony Girgis. Credit: The West Australian, Simon Santi

WA’s largest corporate dairy Lactanz has been thrown a lifeline by Brownes Dairy, which will start collecting its milk from next month.

Lactanz, which produces more than 20 million litres of milk annually at a cluster of farms at Scott River, near Augusta, previously supplied its milk to Parmalat-owned Harvey Fresh, but was advised by that group earlier this year its contract, which expires on June 30, would not be renewed

Brownes Dairy managing director Tony Girgis confirmed the new arrangement with Lactanz, foreshadowed by WestBusiness, in a letter to its suppliers over the weekend.

Lactanz is owned by Melbourne-based AAG Investment Management, which represents a fund based in northern Europe

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“After fully accommodating our farmer’s growth ambitions for the medium term, we felt it opportune to secure Lactanz to meet our local and national growth ambitions,” Mr Girgis said.

Brownes wrote to its 61 suppliers earlier this year inviting them to grow capacity, the result being a forecast average 7 per cent growth over the next three years, from the current base of 144 million litres.

That left room to take on Lactanz’s capacity, given Brownes has adopted a growth strategy since being bought by Chinese dairy giant Shanghai Ground Food Tech, in late 2017.

Mr Girgis said there was further room to take on more dairy suppliers, but this would be approached in a sustainable way that was synchronised with future demand.

WestBusiness reported in March Brownes was planning a $10 million revival of the mothballed Brunwick cheese factory, with works now complete and ready to start commercial production.

Mr Girgis said it would take between three and five years for the cheese factory to reach its full 6000 tonnes a year capacity, eventually using about 60 million litres of milk or 15 per cent of the State’s annual current supply.

Most cheese would be exported to China, where value adding by the parent company would take place.

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