Lion Pty Ltd, the Australian dairy group, is to upgrade production at its Bentley dairy in Perth – but confirmed that the move will see job cuts at the site’s warehouse operations.
The company said the A$40m (US$28.1m) investment will raise capacity at Bentley. Improvements will include the construction of a new distribution centre, the installation of a new packing line, and upgrades to buildings and amenities.
Lion, which is owned by Kirin Holdings, also plans to improve the “efficiency and flexibility” of its logistics and distribution arrangements by consolidating its current multiple distribution depot footprint into a single depot at the Bentley site. As part of this move, Lion said it will outsource its warehouse operations to infrastructure provider Linfox. “Unfortunately as a result of this change all roles within the logistics function onsite at Bentley will be made redundant,” Lion said.
Peter West, MD of Lion’s dairy and drinks business, added: “Any decision that results in job losses is taken extremely seriously. Today’s announcement is about ensuring we remain a sustainable and viable operator in the Western Australian dairy market today and in the future. The outsourcing of the warehouse operations is no reflection on the people working in this area at the Bentley site – the contribution that they have made to our site over many years has been much appreciated.”
Employees impacted by the decision will receive “full entitlements” and outplacement support.
The three-year investment programme comes on top of the A$1.5m Lion has invested in the site over the past 12 months. The company said it will help it meet “growing demand” for its “blockbuster brands” including Dare Iced Coffee and WA Masters, as well supporting its white milk business.
“This significant investment highlights our belief in the dairy industry in Western Australia and the focused approach we are taking to this market, consistent with our turnaround plans,” West added.
“We will continue to target the high-value milk based beverage category, white milk and other key dairy categories, where we believe we can sustain profitability and category growth over the long term for the benefit of our business, farmers, customers, distributors and other stakeholders.”