Stanhope's Fonterra dairy facility will not be affected by the closure of its sister facility in Dennington.
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Employees at the Dennington site were told the dairy plant will close later in the year, leaving 98 people without jobs.
The decision shocked Fonterra employees in Dennington after the factory was told in January it would undergo an $8.6 million expansion.
A Fonterra spokesperson said the decision was a result of a business review following industry changes and a declining milk pool in Australia.
"(This) is leading to heightened competition for milk and the under-utilisation of manufacturing assets," the spokesperson said.
"The closure will consolidate our manufacturing in South Western Victoria into our Cobden factory, leaving us with three efficient primary milk processing plants in Victoria."
Fonterra now has sites in Cobden, produces Western Star butters and cream, Gippsland, which produces nutritional powders and Stanhope.
The Stanhope site makes cheeses including cheddar, mozzarella, parmesan, gouda and pecorino.
Stanhope's plant was expanded last year with $125 million of capital expenditure set aside in January, 2018, to double the size of the plant.
In August, Fonterra announced the arrival new equipment as part of its cheese expansion. Stanhope is now capable of producing 80,000 metric tonnes of cheese.
Three new milk silos were also installed and several vessels for whey processing were promised.
"The Stanhope plant was expanded last year, with the second cheese line commissioned late last year," the Fonterra spokesperson said.
"Currently we're only running one cheese line, with lower milk volumes meaning that we're making decisions about how to run our sites as efficiently as we can.
"However, the Stanhope investment well and truly sets us up for the future and gives us the optionality and flexibility to capture future cheese demand."
The Fonterra spokesperson couldn't confirm if Stanhope would taken on any Dennington employees or whether employees from Rochester's Murray Goulburn site, which formally closed in January 2018, had been taken on a Stanhope during the expansion.
"There will be a small number of opportunities for redeployment, but unfortunately, with low turnover across our sites, these opportunities will be limited," the spokesperson said
"We have a comprehensive support program in place for our people, with outplacement programs and counselling support, and we will make sure they receive their full redundancy entitlements."
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