Milne Agrigroup plan to invest an amount which could exceed $20 million AUD to construct a brand-new compound feed mill for the manufacture of stock feeds, after the sale of its landmark Welshpool site.
The group last week declared that it had rented the previous Chemeq facility located in East Rockingham, along with the containing plant and equipment. The lease is for the period of 40 years with an option to buy included.
The present Chemeq facilities are comprised of labs, offices, a production plant and pharmaceutical-grade designated areas for feed formulation which will are planned to be integrated into Milne's commercial activities and are to be the location for the group's research and development centre.
Graham Laitt, Managing Director of Milne Agrigroup, commented the move followed the selling of the Welshpool site, at the intersection of Welshpool Rd. and Leach Highway, which has been rented back from Woolworths subsidiary Oxygen Pty Ltd, the buyer.
"After 100 years at Welshpool it is time for Milne to build a state-of-the-art feed mill to ensure that we continue to supply the best feed solutions for our customers," Mr Laitt said.
"The Welshpool mill will continue to operate for a number of years because our first priority is to ensure that we are always able to supply our customers and their livestock that depend on us.
"This move implements the first step in our strategy to relocate and to significantly increase our effective production capacity to keep pace with customer demand."
The new mill is expected to have construction commenced on it at the startof next year and it is expected to be specifically designed to manufacture Hyfibre products, which have been made since 2006, subsequently resulting in farmers changing over from home in-house mixing to using Milne's compound feed.
The mill will be equipped with the latest technology to make sure of accurate measurement and control at every phase of the production process and advanced handling technology for quality control.
"The strategy will result in a more than doubling of our production capacity and will ensure that in drought years there is adequate capacity to meet the State's needs," Mr Laitt stated.
"The new mill will have a high degree of automation so we do not expect to increase staff numbers on that account and we do not expect to need to make redundancies because we will be expanding our business operations overall."
Last year Milne Agrigroup had a turnover of $120 million AUD and is now expected to grow that to an expected $140 million AUD this year.
The new feed mill, which is expected to be operational sometime later in 2012 will help supply 14 depots throughout regional WA with compound feed.