Murray Goulburn to axe 301 jobs to cut operating costs

Australian dairy co-operative Murray Goulburn has announced it will cut 12% of its total workforce by the end of September 2012, as part of a major restructure to improve its global competitiveness and save A$100m ($100.94m) in operating costs.

After an internal review of its processing sites and head office operations, the 301 redundancies will leave the company with a total workforce of 2,100.

Murray Goulburn managing director Gary Helou said the changes are important given the recent significant decline in world market prices due to higher global milk supply.

"This initiative will help reduce the impact of falling world prices and a high Australian dollar on our supplier/shareholders," Helou added.

According to Murray Goulburn, about 74 jobs have already been removed through attrition, 168 jobs will be cut primarily across processing plants and distribution centres by June, and an additional 59 jobs at head office operations will be reduced by the end of September 2012.

These jobs cuts are in addition to elimination of 64 jobs in March 2012, when the co-operative announced that it would close its milk driers in Rochester, Victoria.

Murray Goulburn said that the cost savings would enable it to raise the prices paid to dairy farmers, which will boost the local industry.

The savings are also expected to improve Murray Goulburn’s manufacturing efficiencies, lower head office expenses, and strengthen its global competitiveness. The changes will, however, not affect the company’s production as all sites remain operational.

Recently, Murray Goulburn set up sales offices in Dubai and Singapore, in an effort to expand its presence in the Middle East and Southeast Asian markets.

For the full year 2011, the co-operative posted 60% rise in net profit to A$40m ($40.37m), and generated revenue of A$2.29bn ($2.31bn), half of which was contributed by overseas markets.