Rural and Regional Development Parliamentary Secretary Damian Drum announced the funds at the Lockwood facility yesterday.

He said it was important the government supported Hazeledene’s, which had rarely sought government assistance.

“When a company goes out on their own in good times and grows their business, there is going to be a need for government assistance to consolidate what they have done,” Mr Drum said.

“This company has gone out on their own and reinvested back into the company and into the community.”

The state funds will come from the government’s Regional Growth Fund.

The money will go towards $8.7 million in work that includes a seven-kilometre water pipeline, a gas-fired co-generation plant and an anaerobic sludge digester for waste treatment.

“On normal days we are OK, but Bendigo has extreme heat, as everyone knows, and there have been times where we’ve had four to five days of extreme heat,” Hazeldene’s managing director John Hazeldene said.

“This particular year we had two extreme days just a few weeks ago and we ran dangerously low (of water) in two days.

“If that stretched to five, we would have run out.

“It happened about eight years ago when we had to truck water in 24 hours a day for five days to keep the chickens alive and keep processing. As more and more houses are built on the pipeline there is less pressure.

“We are at the end of the line and it is just one of these things we had to do and it is great the government got behind us to help this project.”

The second phase of the modernisation work will include a gas-fired generator to reduce peaks and cut the company’s electricity costs. The anaerobic digester will follow at a later date.

Hazeldene’s also plans to undertake a $20 million upgrade of its processing plant and its production and packaging plant.