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Transformational Investment to Underpin Lion's Dairy Growth in Western Australian Market

19 January 2016: Lion Dairy & Drinks (LDD) has today announced a transformational investment of $40m over three years to underpin its dairy growth in the Western Australian market.

This investment signals LDD’s commitment to Western Australia for the long term, and will deliver a comprehensive modernisation of the Bentley dairy processing plant in Perth, together with new manufacturing capability and a more efficient route to market to better serve customers and consumers across the state.

A planned sale of surplus land assets will fund a transformation of the Bentley site over three years, with improvements to include:

  • the construction of a new Western Australian Distribution Centre;
  • the installation of one way packaging technology, and a new filling line, to expand manufacturing capacity in milk based beverages and enhance LDD’s efficiency in white milk.  This will help meet growing demand for LDD’s blockbuster brands such as Dare Iced Coffee and also support plans to grow the iconic WA Masters brand together with LDD’s white milk business;
  • a significant upgrade of buildings and amenities and
  • new internal roads and a new north / west exit to enhance driver safety and reduce vehicle traffic in adjacent residential areas.

LDD also plans to improve the efficiency and flexibility of its logistics and distribution arrangements, to deliver the best possible service to customers.  In particular, the business will consolidate its existing multiple depot footprint to a single new depot on site at Bentley. As part of this decision, LDD will outsource its warehouse operations to Linfox allowing the company to take advantage of their expertise to drive greater efficiencies around the business. Unfortunately as a result of this change all roles within the Logistics function onsite at Bentley will be made redundant.

LDD Managing Director, Peter West said: “This transformational $40m investment makes clear LDD’s intent to compete and grow our dairy business in Western Australia over the long term.

“Any decision that results in job losses is taken extremely seriously. Today’s announcement is about ensuring we remain a sustainable and viable operator in the Western Australian dairy market today and in the future. The outsourcing of the warehouse operations is no reflection on the people working in this area at the Bentley site - the contribution that they have made to our site over many years has been much appreciated,” Mr West said.

“Our people are our primary concern right now and we are focused on supporting them and their families through this process.”

All Lion people whose job has been impacted will receive their full entitlements and will be offered outplacement support.  Free independent confidential counseling is also being offered to all employees and their families through our People Support Program. We will also consider redeployment opportunities along with relocation assistance where appropriate.

The $40m investment comes on top of $1.5million LDD has invested in the site in the past 12 months.

“This significant investment highlights our belief in the dairy industry in Western Australia and the focused approach we are taking to this market, consistent with our turnaround plans,” Mr West said.

“We will continue to target the high-value milk based beverage category, white milk and other key dairy categories, where we believe we can sustain profitability and category growth over the long term for the benefit of our business, farmers, customers, distributors and other stakeholders.

“LDD will continue to invest in improving our competitiveness and flexibility, together with our manufacturing capability, marketing and sales execution, as part of a balanced and ambitious strategy in Western Australia.”

Note to editors:

As a result of Lion Dairy & Drinks outsourcing its warehouse operations 30 Logistics roles will be made redundant at the Bentley site.

For more information:

Elise Gare

External Relations Director, Lion Dairy & Drinks

Phone: +61 437 306 437

elise.gare@lionco.com

 

 

Ian Haberfield

External Relations Manager, Lion Dairy & Drinks

Phone: +61 3 918 6181

ian.j.haberfield@lionco.com