Tasmanian Dairy Products Co Ltd (TDP) has announced its plans to construct a multi-million dollar milk processing facility at Smithton.

Utilising world's best practices in dairy manufacturing, TDP will process raw milk purchased from local farmers to produce a range of high quality dried milk products for export to overseas markets in Asia and the Middle East.

TDP plans to adopt a form of co-operative ownership to share the economic benefits of vertical integration with its local farmer-suppliers, offering an opportunity that has not been available to Tasmanian dairy farmers for many years.

TDP chief executive officer Gregg Pollack said that the company had reached a preliminary agreement to acquire the Gunns Ltd site at Smithton to construct the facility, through completion of the site purchase is subject to satisfactory progress on the Forest Principles Process in Tasmania.

"Construction time and cost will be reduced by utilising the site's existing infrastructure." he said.

"There are also significant environmental benefits to the local community through the conversion of an existing working site."

Mr Pollack said the company had received strong support from both the state government and the Circular Head Council for its development proposal.

"The company has recently completed a detailed feasibility study, funded in part by a grant from the Tasmanian Department of Economic Development, Tourism and the Arts (DEDTA)," he said.

"TDP has also received funding from the Circular Head Council to assist the company's development and engineering activities for construction of the processing facility."

Mr Pollack said TDP was pleased to be working with state government, the Circular Head Council and the local community to bring this venture to fruition.

"The support shown by both the DEDTA and the Circular Head Council validates our strategy for driving growth in the dairy industry on the north west coast and ultimately throughout the state," he said.

"Importantly, by providing a new market outlet to local dairy farmers and returning profits to the community through a co-operative structure, we strongly believe that we will be providing the necessary incentives to both attract milk supply for our plant and to grow the overall milk supply in the region."

Bradley Watson, shareholder and director of TDP, who is also a leading dairy farmer in the region, said: "As an active member of the local dairy industry, I am pleased to be able to offer farmers in the Circular Head area an opportunity to share in the success of this venture.

"While farmers in other dairy-producing regions can realise the direct benefits of owning production facilities, for the past few years these benefits have not been available to farmers in Tasmania.

"We know that this region can accommodate significant growth in dairy farming, and we are confident our project will create a favorable environment to accelerate that growth.

"Therefore, we do not believe we will be competing for our share of a static milk supply in Tasmania, but rather sharing in a growing volume of local milk production with ample supply for all processors."

TDP has formed a board of directors comprising industry experts, business leaders and local farmers, and is working with the foremost authorities in the dairy industry regarding plant design and product specification.

Mr Pollack said TDP intended to leverage the reputation of Australia in general and Tasmania in particular for producing natural, green and high quality agricultural products with the goal of building a premium Tasmanian dairy brand in the global marketplace.

Released by:  Nicolas Turner    Tel: 6210 5206 or 0418 538 865