Australian dairy company Bega Cheese has unveiled plans to build an extraction plant at its Koroit facility in western Victoria.

The company secured a long-term lactoferrin supply agreement, which will support an investment of A$34m ($24.1m) to establish the unit.

Lactoferrin is an iron-binding, naturally forming protein found in milk. It is used in consumer health and nutritional food products such as infantry formula due to its anti-microbial, anti-inflammatory and immunological properties.

“This investment at Koroit will position Bega as one of the largest manufacturers of lactoferrin globally and is a major step forward.”

Bega CEO Paul van Heerwaarden said: “The new lactoferrin plant will enable us to produce more than 35 tonnes of lactoferrin each year to be used in products such as infant formula and pharmaceuticals.

“This investment at Koroit will position Bega as one of the largest manufacturers of lactoferrin globally and is a major step forward in the growth of our bio-nutrients business.”

Bega expects to produce 35 tonnes of lactoferrin extract a year at the facility, which complements its production at the Tatura plant located northern Victoria.

Last July, Bega Cheese agreed to purchase Saputo Dairy Australia’s (SDA) Koroit processing facility in Victoria for A$250m ($185m), including average inventory.

The acquisition was fully funded through new and existing bank debt facilities.

Located in Koroit, Western Victoria, the facility has the capacity to processes nearly 300 million litres of milk for producing butter and milk powders.

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