Bega Cheese is to close its Coburg cheddar and mozzarella cheese plant in Melbourne because its capacity and city location are not considered conducive to expected future company growth.
The plant, which makes cheese for Bega's private label and food service supply contracts, will close this week.
Some staff will be offered jobs at other Bega sites, but the company said redundancies would apply to many of those employed at Coburg.
Bega executive chairman, Barry Irvin, said the company would continue to develop its domestic and international cheddar and mozzarella cheese business via production from the company's other dairy sites and contracted manufacturing arrangements.
The Melbourne plant has been owned by Bega for the past decade.
However, a review of the company's network of production plants following its recent acquisition of the $250 million Koroit site from Murray Goulburn/Saputo in south western Victoria, found Coburg was not viably able to support Bega's growth expectations.
A decision regarding the sale and "full exit" from the northern Melbourne site would be made in "due course".
The company was not expecting to realise a sale value as high as Coburg's current book value.”
BGA Price at posting:
$4.82 Sentiment: None Disclosure: Held
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