Australian dairy co-operative Devondale-Murray Goulburn (Devondale-MG) will make a $2.5 million investment in equipment at its Koroit plant in western Victoria as a result of a five-year agreement with global dairy company Danone. Devondale-MG is set to supply 50,000 tonnes of Growing Up Milk Powders (GUMPs) base to Danone over the life of the agreement.

Devondale-MG said the investment would enable the Co-operative, which processes a third of Australia’s milk, to meet Asia’s “rapidly increasing demand for GUMPs”, a dairy nutritional product for young children.

“Over the past three years, Devondale-MG has experienced strong and sustainable increases in demand for its ingredients from Danone’s nutrition division, driven by rising Asian demand for GUMPs, and nutritional powders,” said Gary Helou, Devondale-MG Managing Director.

“Partnering with Danone offers Devondale-MG a significant opportunity for growth in an important line of product for our Co-operative,” said Mr Helou. “We are increasingly focussing on producing higher value and speciality ingredients such as GUMPs, as they provide higher margins and reduce our exposure to the more price volatile commodity products,” he said.

According to Devondale-MG, GUMPs is among the “fastest growing dairy nutritional category”, increasing between 10 to 20 per cent each year. Devondale-MG began supplying GUMPs base to Danone in Malaysia in July 2011 and Thailand in December 2012.

The new deal with Danone sees Devondale-Murray Goulburn continue with its $200 million investment strategy to make the most of the opportunities it has identified in the Asian market.

Australian Food News reported in April 2013 that Devondale-Murray Goulburn was to invest $19.1 million in its facilities at Leongatha in Victoria, to lift the site’s Ultra High Temperature (UHT) milk manufacturing output by approximately 70 million litres a year. The Co-operative said the UHT milk was destined largely for Asian markets.

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