Bega boss Barry Irvin raises stainless steel concerns

Australian dairy’s not-so-secret problem – that it has too much stainless steel – has been addressed by an industry leader.

Bega management say the Australian dairy sector’s manufacturing capacity is under-utilised, following its decision to close its Canberra site.

Previously known as Capitol Chilled Foods, Bega announced earlier this week it would close the Canberra processing facility, resulting in 19 employees being either redeployed or made redundant.

Production will shift to Penrith, in Sydney’s western suburbs.

Bega executive chairman Barry Irvin said there was need for further rationalisation within the sector, despite Saputo also calling time on its Maffra site in Gippsland.

Barry Irvin, Executive Chairman Bega Cheese

“There is still too much stainless steel in this country for the level of supply that we have,” Mr Irvin said.

Bega this week reported a half-year revenue increase of 11 per cent, including four per cent volume growth in the branded business segment.

Revenue exceeded $1.67 billion, but overall profit fell 74 per cent to $7.3 million in the six months to December 25.

Group revenue increased 11 per cent to $1.7 billion.

In an interview with The Weekly Times, Mr Irvin noted a significant gap between international prices and farmgate offerings domestically.

However, he said it was too early to forecast farmgate figures for the 2023-24 financial year.

“Australia is a little bit of an outlier as far as (international) milk prices are concerned,” Mr Irvin said.

“Interestingly, the global markets have almost corrected completely and they are about 30 per cent down on what they were this time last year.”