Home-Grown Quality

Tasmanian Dairy Products

We spoke with CEO Tony Catania about TDP, the success the company has enjoyed to date, and how the business is positioning itself for future growth.

Launched as a joint venture between Tasmanian investors, dairy food company Murray Goulburn Co-operative (MG) and Mitsubishi Corporation in 2011, TDP has processed over 100 million litres of raw milk since starting just last year. Murray Goulburn had been looking to expand its operations into Tasmania and dairy farmers in the state had expressed a desire for MG to commence operations there after seeing its successful ventures in Southeastern Australia.

So, in September 2012, TDP opened an $80 million dairy processing facility in Smithton – on time and on budget. This processing facility has the capacity to process up to 300 million litres of milk annually. Working with local producers, TDP obtains its milk from 60 farms throughout the state and employs 40 staff on site at the processing plant. Smithton is located in the far Northwest of Tasmania, a region considered to be the heart of the state’s dairy industry due to its annual rainfall of between 1,000 and 1,200 mm, and its tendency toward comparatively fewer frosts than other regions in the state.

“To actually commission an operation of this substantial nature and to do it on budget and on time and produce high-quality products is an achievement in and of itself,” Mr Catania shares.

The facility’s launch was celebrated with a grand opening that welcomed local farmers, the Premier of Tasmania Lara Giddings, and shareholders from Mitsubishi and Murray Goulburn, as well as financiers, bankers, and workers who constructed the facility. Murray Goulburn, which owns and operates seven dairy processing sites in Victoria and Tasmania, made the investment in Tasmanian Dairy Products in 2011 to facilitate the construction of the processing plant.

TDP processes milk that is then converted into powdered form and primarily sold in international markets, particularly in the Middle East and Asia, with some sold in Australia. The products TDP creates include full-fat and skim milk powder and are used in diverse market sectors such as baking products, chocolate manufacturing and in infant formula. The plant is state-of-the-art and uses the latest technology in dairy processing and packaging.

Mr Catania himself has over two decades of experience in finance and dairy operations with the Murray Goulburn Co-operative. “Our goal is to become a leading Tasmanian dairy company, providing competitive milk pricing and offering excellent service and value to local farmers as well,” he says. “We have some terrific local experienced people who have a direct connection with dairy farmers and they can provide great service, advice and assistance to farmers on how to improve their businesses.”

According to Dairy Australia, Tasmania has about 430 dairy farms throughout the state and produces approximately 800 million litres of milk, which represents 8 per cent of Australia’s total milk production. With these figures and an increasing demand in the market for higher-quality dairy products, Mr Catania is positive about the future of the dairy industry and the impacts it will have on Tasmania and on Tasmanian Dairy Products.

“With our new facility, we can help increase the output of milk production by almost 40 per cent,” Mr Catania explains, citing TDP’s processing plant’s ability to process up to 300 million litres of milk on an annual basis. “TDP has helped lift the capacity of the state. What that signals to farmers in the state is that it actually lifts the lid and says to them, ‘you can grow.’ We want Tasmania to grow beyond 1.1 billion litres [the 800 million litres produced in the state plus the 300 million litres of milk that can be produced by TDP]. With the natural resources, land availability, and the number of farmers Tasmania has, we feel that the industry can double in the next 10 years. If it could grow to 2 billion litres, it will position Tasmania as a major player in the market.”

Mr Catania explains that dairy products from the state are already viewed and received well in both domestic and international markets. “Tasmania is becoming well known for high quality milk products due to the clean, green environment here as well as an abundance of natural resources, and it doesn’t have the variations in climate compared to states in Mainland Australia.”

Future plans for TDP, then, include growing its milk supply, maximising factory operations as well as adding even higher value to its product range. Mr Catania says that TDP currently sells its product into the commodity ingredients market, but wants to aim even higher in terms of quality. The company’s strong principles of food safety as well as its offering of high quality products that meet or exceed food safety standards, he says, will keep TDP growing.

“The majority of our staff have been working for the company for only seven or eight months, but during that time, we’ve had them take intensive training courses in dairy technology and food safety / quality. We plan on having more training programs in dairy manufacturing operations for our employees,” Mr Catania says.

Of course, food safety and quality are significant issues for any dairy processing plant, and TDP has made the necessary efforts to ensure it adheres to the highest of standards. This attention to quality has meant that the company has been approved by the Department of Agriculture, Fisheries, and Forestry (DAFF), which gave TDP license to export its products to foreign markets. In addition, TDP has also been accredited by the European Union (EU), so the company can export its products to European markets in the future.

“To achieve that within a few months of operation demonstrates TDP’s dedication to high quality products that sell around the world,” says Mr Catania.

Some challenges that TDP faces include having competitive milk pricing for farmers and providing the valued services that dairy farmers in Tasmania expect; increased competition from other processors in the state; and ensuring there is sufficient on-farm and factory labour to obtain and process the milk. “We don’t necessarily see these as difficulties, but challenges that we know have to be addressed head-on with a positive outlook and solid plans,” explains Mr Catania.

For example, TDP is planning to build an alliance with a new agricultural college that has recently opened in Smithton, AgriTas Trade College (agritas.org.au). “It will provide a centre of excellence and give local people the opportunity to learn about agriculture and work in the dairy industry after successfully completing their studies.” TDP has plans in place to provide on-the-job training to students of the school.

Ultimately, Mr Catania sees future success for not only TDP, but for Tasmania as a whole. “What we’ve been able to achieve here in Tasmania is a demonstration that a business can develop very quickly in an area of agriculture that is very important to the local economy, and we’ve done that in the face of a decline in other industries within the region,” he says.

“This business creates a fantastic opportunity for dairy producers throughout the state, has increased competition, and provides opportunities for farmers to grow their milk supply as well as for new farmers to enter the industry.”

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December 16, 2017, 6:54 AM AEDT

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