40+ jobs lost as Pauls closes Rocky factory
IN A devastating decision for CQ, Lactalis, the parent company for Pauls, has announced it will be closing its Rockhampton factory from February 28, putting 47 people out of work.
The move will end a partnership with the Rockhampton community spanning 30 years.
In a letter to Rockhampton MP Barry O'Rourke, Lactalis Australia Chief Executive Ron Walden said his company had completed an analysis of its Queensland manufacturing capabilities and was announcing changes in response to its Rockhampton and South Brisbane factories due to the state's changing milk supply, particularly in Rockhampton
"We have reached the difficult decision to close the Rockhampton factory, effective 28 February 2020," Mr Walden said.
"This decision was not taken lightly, however the factory has not been processing at full capacity for a number of years and is only in operation three to four days per week with the assistance of redirected milk supplies from South East Queensland.
"The available farm milk in the Rockhampton region has fallen to circa 12 million litres, supporting no more than 1.5 days production at the Rockhampton site.
"Similarly the consumer buying trends, moving to major supermarkets, has reduced the volumes being distributed and sold through the local Rockhampton supply networks.
Mr Walden said the welfare of the 47 Lactalis Australia employees at the Rockhampton factory was their top priority and they would be working with everyone affected by the closure.
"All forms of support will be available to our employees throughout this transition time," he said.
"This will include looking for opportunities where we can redeploy our staff to different Lactalis locations.
"We will continue to purchase milk from our dairy farmers in the Rockhampton region and redirect it, at our cost, to Nambour and Brisbane."
He didn't expect there to be any impact on farmers in the Central Queensland region.
"We are very sorry to be ceasing our factory operation in the tight-knit Rockhampton community, [which] has been part of the Lactalis/ Pauls family for 30 years," he said.
"Lactalis products (including Pauls, Ice Break, Vaalia and Breaka) will still be sold via our local distributor and available in local stores."
In a statement released today, QDO President and Lactalis supplier Brian Tessmann blamed Queensland's declining milk production over the past decade which meant that the closure of the Rockhampton plant was "inevitable".
"While this certainly will be a devastating blow to those employed at the Rockhampton plant, the closure should not affect the dairy farmers currently supplying to Lactalis," Mr Tessmann said.
"Production into the Rockhampton factory has been sporadic for a while now. Milk produced in the Central Queensland region for Lactalis will simply be transported down and processed in either the Nambour or South Brisbane factories.
"Only farms around Biggenden and to the north have had their milk going regularly to Rocky.
Before deregulation in 2000 Queensland produced 848 million litres a year and had over 1500 farms."
Queensland milk production has dropped by more than 15 per cent year on year from 2018 to 2019 and was expected to continue to decline due to ongoing drought and the number of farm closures. While recent rain over most of the south east has been a welcome relief, Lactalis said it would take at least a year before farmers saw a return to normal production and only once drought declarations were rescinded.
Mr O'Rourke took to social media to vent his outrage at the decision and post the full letter from Lactalis' CEO on its decision.
"When I was at the Pauls factory just two weeks ago to show my support for the workers there was absolutely no inkling the company was planning to close the site down," Mr O'Rourke said.
"There has been no warning on this and no consultation. They have done the dirty on our city and their own workers.
"I've sought an urgent meeting with the company to protest this decision and urge them to reconsider. I'll be reaching out to the workers as well to offer all the assistance I can.
"I was happy to show this company my support on the basis it employed locals. To have them turn around and do this less than a fortnight later is a disgrace."
Mr O'Rourke said it was 'devious corporate conduct at its worst' and there was no time for that in regional Queensland.
"All we want is good, secure jobs and if a company provides that they have our support. If tough decisions do have to be made, we at least expect them to be honest with us from the outset. These kinds of heartless games have no place here," he said.
"I will say, however, that as appalled as I am with this decision, I understand that it is partly a reflection of the dismal state of our dairy industry.
"Damaging market practices like $1 milk mean that, for many farmers, it is sadly no longer worth it to be in the dairy business."
Mr O'Rourke said it was shameful that the federal Liberal and National Parties last year opposed a bill backed by Labor and One Nation to set a floor price on milk that would ensure farmers were no longer operating at a loss.
"Even more worrying was the response of then Agriculture Minister David Littleproud when Labor first proposed the floor price this time last year, who argued "subsidising farmers" would offend our trading partners," he said.
"This is the bloke who is now deputy leader of the National Party - an organisation that used to care about farmers. I won't claim to have all the answers on this but it's clear something has to change.
"That's a broader debate, however. Right now my focus is on supporting these local workers and their families and pushing Paul's/Lactalis to reconsider."
After speaking on the phone this afternoon with Lactalis CEO Ron Walden, Mr O'Rourke relayed to The Morning Bulletin the outcome of their discussion.
The Rockhampton MP was ropable and forthright in expressing his concerns for the community, demanding to know what Lactalis intended to do to mitigate the damage.
Mr Walden told him that he had staff on the ground at their Rockhampton factory offering support and redundancy packages to the soon-to-be unemployed workers.
He said employees were also being offered the option to relocate to other Lactalis depots around the country.
Mr O'Rourke said he expected an update from the Department of State Development, Infrastructure and Planning who were also working with the factory's staff.