Nestlé to close Australian facility as expansion in Brazil gains traction

AUSTRALIA – Nestlé has announced that it will be closing its Tongala processing plant in Victoria, Australia and move the facility’s operation overseas.

The closure of the facility, which primarily produces tinned milk products, will result into loss of all 106 roles in the factory. However, the closure will be staged progressively throughout a period of up to 18 months.

ADVERT

Commenting on the closure, general manager, Andrew McIver said: “People just don’t buy tinned milk like they used to, and cheaper imports have eroded our business further.

“At the same time, the equipment in this factory is old, and the investment we need to make sure it can operate reliably in the future means that the factory is no longer viable.”

Nestlé’s move to close of the facility comes at a time when the company has recently been investing in the plant in attempts to improve the viability of the factory.

This has included producing Maggi culinary products since 2010, Nestlé Health Science medical nutrition products from 2012 and Milo Ready to Drink since 2017.

While Nestlé reported that these additional products supported the factory, McIver said, “as milk is the bulk of what the factory makes, the newer ranges aren’t enough to maintain manufacturing at the site.” 

Over the next 12 to 18 months, all production at the factory will progressively move, mostly to Nestlé factories overseas. Final closure is anticipated between late 2020 and mid 2021.

Nestlé partners Bela Vista in Brazil

Nestlé Brasil has signed an agreement with Laticínio Bela Vista, Brazilian owner of the the Piracanjuba and LeitBom brands for the production and distribution of UHT milk in Brazil.

The aim of the partnership is to accelerate the expansion of the UHT milk market in Brazil and boost the position of the Ninho and Molico brands.

As part of the agreement, Nestlé will license its Ninho and Molico brands, exclusively for the liquid milk segment in Brazil, to Laticínios Bela Vista for ten years, reports Food Bev.

“This is the beginning of a partnership between companies that have a strong presence in Brazilian homes and that have the trust of consumers,” said Marcelo Melchior, president of Nestlé Brazil.

“We believe we have found the ideal partner to leverage our brands in the UHT milk segment.”

Laticínio Bela Vista will take over some Nestlé units in Brazil that produce UHT milk, using the lines that are already installed and absorbing most of the employees at facilities in Três Rios and Araraquara, and part of the factory in Carazinho.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.