Rochester 'gutted' after Murray Goulburn announces dairy plant closure


UPDATE 3pm: The federal Opposition has said Murray Goulburn took too long to shore up the dairy farming industry and has criticised the government for not taking a harsher stance against the company.

Federal shadow agriculture spokesman Joel Fitzgibbon said what was a bad day for employees at three Murray Goulburn plants was a better occasion for dairy farmers whose debt will be written down.

But the MP described as "inexplicable" the government's decision not to insist "heads should roll" at Murray Goulburn after farmgate milk prices were slashed last year. 

"Dairy farmers would have had immediate help and they would not have walked away from Murray Goulburn," he said.

Mr Fitzgibbon said Murray Goulburn chiefs today assured him employee entitlements would be paid.

The government should also provide the workers with assistance, Mr Fitzgibbon said. 

"They should be putting all the resources of government to the local communities affected to ensure we do everything we can to alleviate the pain for those communities."

The plant closure coincides with plans for government agencies to relocate to regional cities.

"Barnaby Joyce should spend less time pretending to send government jobs to the regions and maintain private sector jobs (already there)," Mr Fitzgibbon said.

Mr Joyce's office was contacted for comment.

Darren and Amber Pain. Picture: MARK KEARNEY

Darren and Amber Pain. Picture: MARK KEARNEY

It was too little too late for some dairy farmers, with local business owner Darren Pain saying many who supplied Murray Goulburn had already moved on.

Until last year’s order to pay back part of their income, dairy farmers were among the most regular customers at Mr Pain’s sportswear store.  

If factory workers' families were forced to move out of town to find employment, businesses could again take a hit, he said.

While MG staffing might have suffered during a downsize in 2012, those cuts affected mostly out-of-town workers, Mr Pain said. It would be locals who were hit hardest this time.  

The businessman said the town would need to call on its resilience to get through the coming change and make lobbying for the plant’s sale among its first priorities, he said.

"There's a lot of passionate community members," Mr Pain said.

"It's a shame it's got to come to that, but it's something we have to do now." 


UPDATE 12.25pm: Young families that will face financial insecurity when Murray Goulburn closes its Rochester plant fear for the mental health of their out-of-work loved ones.

Rochester resident Carmen Moon said her husband, Stacey, worked at the dairy processing plant for about five years and his income supported their four children.

It was their only way of paying off their two mortgages since Ms Moon gave away work to raise the children.

She said Mr Moon, who was not at work today, found out about the closure from the media and still had not been contacted by his employer.

The lack of communication disrespected her husband's years of hard work, Ms Moon said.

Losing their livelihood would compound the family's hardships;  one-year-old daughter Eliza underwent open heart surgery at the Royal Children's Hospital in Melbourne this year.

"We've had a tough couple of years without worrying about work," she said.

Of her female friends, half were married to Murray Goulburn employees, families she said were already battling mental ill health since fears of the plant's closure began six months ago.

"It affects these blokes," Ms Moon said.

"They're tough on the outside, but when it's their livelihood at stake, things change."

Ms Moon also sat on Rochester primary school's council and said recent gains in student numbers could be reversed if the plant did not remain open.

This year was the first time since the end of drought that the number of new enrolments were as higher than the number of graduating students.

"You've just got to think, 'Is that going to happen all over again?" 

Ms Moon's anger was shared by another wife of a Murray Goulburn employee, who asked to remain anonymous.  

The couple had three children aged eight and younger.

"All the employees and their families are completely devastated at this outcome, and the fact that most employees found out via social media rather than a text or phone call is abysmal," she said.

"Every single employee at that factory went above and beyond their job description and gave their all to making the factory what it is.

"The work ethics, positive mindset and morale of the workers has always been exceptional and now that's all been lost due to bad management and poor decisions."

UPDATE 11.40am: Murray Goulburn's shares have plummeted this morning following the co-operative's announcement it would close three plants, shed 360 jobs and suspend dividend payments.

A short time ago MGC was trading at 93 cents a share on the Australian Stock Exchange, down 10.1 per cent on its opening price

UPDATE 11.15am: Murray Plains MP Peter Walsh has said the closure of the Rochester factory is a devastating blow for the town.

“Suppliers and local communities are living with the consequences of decisions that were made by those who have now left Murray Goulburn,” Mr Walsh said.

“The dairy crisis has hit local producers hard and the loss of more than 150 local jobs will be keenly felt in the town."

Mr Walsh said producers were already under pressure from average seasonal conditions before the milk supply support package was introduced.

“They have endured a huge amount of stress and financial hardship as a result of it," Mr Walsh said.

“In 'forgiving' the MSSP payments, Murray Goulburn has confirmed what people had been saying since it was introduced – that it wasn’t fair and it would cost Murray Goulburn milk suppliers.

“The Andrews Government must ensure these workers have jobs to go to when the plant closes.”

UPDATE 11am: Small businesses are bracing for the repercussions of milk giant Murray Goulburn's decision to close its Rochester processing plant.

Business leaders met in front of the doomed factory this morning to discuss the future of the site and the viability of the town once the dairy giant packed up.  

IGA supermarket manager Brad Major said the lack of certainty about the town's future made him nervous about renewing his business lease.

"It's disappointing, the uncertainty of it," Mr Major said, explaining friends and family members were employed inside the factory.

"It's been here as long as I have." 

Passing traffic could also fall away when about 100 employees are let go, he said.

Parson's clothing store owner Belinda Gordon only bought her business last year and worried the plant's closure could mean Rochester residents "tightened their belts".

She hoped the town's regional setting was reason enough for people to live there.

"People are attracted to head out of town," she said.

But Ms Gordon said there were other industries in Rochester performing well, including engineering and manufacturing, and those would keep local businesses ticking over.

People had long been aware of agriculture's decline, she said, so some already had alternative sources of income.

Rochester Business Network president Glenda Nichol called on Murray Goulburn to make the site available to other processors.

Only then would it not be a "white elephant" in the centre of the town, Ms Nichol said.  

"I'd like to see them sell the factory to keep it open, even though they probably don't want to sell to a competitor," she said.

She said today's news was "shocking" for the plant's employees. 

"There's a lot of heartache in the community."

Councillor Lee Wilson echoed Ms Nichol's sentiments when he described the mood in Rochester as "gutted".

He feared for sometime the company’s decision was inevitable.

His community was accommodated Murray Goulburn demands for decades, he said, and it was time the company reciprocated that support.

The town allowed Murray-Goulburn to build over a central street 30 years ago, relocating a church and series of small businesses in the process.

"We put up with noise, disruptions when they're doing maintenance or work," Mr Wilson said.

While cost cutting could mean farmers were more secure, Mr Wilson did not believe the dairy industry could afford to employee workers from the plant and he implored Murray-Goulburn to re-train its redundant staff for work elsewhere.

UPDATE 10.20am: More than 100 people will lose their jobs at Rochester.

Murray Goulburn said 105 employees would be out of work when it closed the Rochester plant.

Another 135 will be out of work with the closure of its plant in Kiewa, south of Wodonga, by mid-2018.  

Its plant in Edith Creek, Tasmania, will shut at a cost of 120 jobs. 

UPDATE 10am: Former dairy farmers Donna and Peter Sexton have said the MG closure will decimate Rochester.

“It’s not just the farmers, it’s the whole town,” Ms Sexton said.

“We had heard talk for a long time. The hierarchy at Murray Goulburn didn’t value Rochester.

“Going back years go to suppliers meeting, they would never commit or do anything new. The writing was on the wall, it was a given unfortunately.”

The Sextons stopped dairy farming in February after Murray Goulburn’s dropped the price of milk and demanded farmer’s pay back a portion of their income. 

“It’s fair enough dropping the price, we dealt with that, but to say they wanted money back that they had already paid and we had already spent was too much,” Ms Sexton said.

“We reassessed our future and sat down with our children who are keen on farming but not dairy farming.

“We had been dairy farming for 27 years and were getting a bit tired of it.”

The Sextons are now dry land farming on a property between Boort and Charlton but their sympathies are with other dairy farmers in the Rochester region.

UPDATE 9.30am: Campaspe shire councillor Lee Wilson has described Murray Goulburn’s decision to leave Rochester as a “gut-wrenching disappointment”.

“This really is the worst news. There was a bit of me that feared this would happen,” he said.

“It’s not a surprise but it is a classic gut-wrenching disappointment.”

Mr Wilson, who is the councillor for the Rochester ward, said he feared for the town’s future without the milk company.

“Having seen what happens in other towns when they lose a large employer, what’s in the back of my head is, ‘what do we look at in the next few years?’,” he said.

“This doesn’t just hurt Rochester, it hurts the district. It will flow to local businesses and I am hoping people can pick up work elsewhere.”

The Murray Goulburn site, which stands at the centre of Rochester, will be closed by March next year.

Mr Wilson said he hoped Murray Goulburn would be open to entertaining other potential uses for the site.

“Over the last 10 or 15 years we have seen closures and wind downs and it has an on flow to broader community,” he said.

“My genuine fear is that Murray Goulburn lock this site up and don’t make it available for other businesses. 

“Rochester gave up a street about 20 years ago for Murray Goulburn to build factory over it. 

“The town has given a lot to Murray Goulburn, so the worst thing is for Murray Goulburn not to entertain other uses for site.”

Follow the highs and lows of Murray Goulburn’s past few years here: ​

EARLIER: MURRAY Goulburn Co-operative has announced it will close its manufacturing facility at Rochester as part of a dramatic plan to slash costs.

The Rochester facility will start its staged closure in August in anticipation of it being shut down by the third quarter of financial year 2018.

Facilities at Victoria’s Kiewa  and Tasmania’s Edith Creek will also close, with about 360 employees to lose their jobs across the three sites.

In a statement to the Australian Stock Exchange, Murray Goulburn said: “These decisions are a continuation of efforts to address MG’s cost base, improve efficiencies and ultimately increase earnings and farmgate milk pricing.

“Once completed the closures are expected to deliver an annualised net financial benefit of $40 million to $50 million. MG anticipates a net financial benefit in FY18 from the closures of approximately $15 million.”

The decision comes as a result of a review into Murray Goulburn assets.

Chief executive Ari Mervis said it was a difficult outcome to reach.

“At MG we are acutely aware of the impact that our decisions will have on our various stakeholders, including the communities in which we operate,’’ he said.

“We are committed to ensuring that we provide our affected employees with appropriate levels of support and the recognition that they deserve during this period of transition.’’

Mr Mervis said the company would would provide career transition and redeployment services to employees.

He said it would also work with federal and relevant state governments to leverage existing programs.

“These have been difficult decisions to make, however they are necessary steps on the journey to ensure the future strength and competitiveness of Murray Goulburn,’’ he said.

“A strong MG is of fundamental importance to the Australian dairy industry and these decisions are necessary to lay the foundation for the future.” 

On Friday the Australian Competition and Consumer Commission said it would take the milk processor to court, a year after Murray Goulburn slashed farm gate milk prices and forced farmers to pay back money they had already received.

The so-called milk supply support package gave farmers a choice of repaying their debt in a one-off lump sum during 2016, or to accept a lower farm price for the next three years. 

More to come.