Fonterra will spend $120 million on rebuilding its cheese factory in northern Victoria to take advantage of new trade agreements with Japan, South Korea and China.
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The investment came after a fire ravaged the factory in Stanhope, 200 kilometres north of Melbourne, about a year ago.
Fonterra, a New Zealand-based co-operative, is negotiating with its insurer about recouping some of the rebuild costs. It has also received cash through the Victorian government's $500 million Regional Jobs and Infrastructure Fund.
Fonterra Australia managing director Judith Swales said up to 30 jobs would be created and the factory would be able to produce 45,000 tonnes of cheese a year; a 50 per cent increase on the former site.
She said the plant would supply the domestic market, in which it has a 23 per cent share, as well as overseas customers.
"It will leverage our footprint in 100 markets and also the recent free-trade agreements with China, Japan, and [South] Korea," Ms Swales said.
"It will [also] provide whey to our Darnum and Dennington plants, which are at the core of our growing Australian nutritionals business."
Fonterra struck a multimillion-dollar deal to produce baby formula for Bellamy's Organic at its Darnum factory in eastern Victoria.
"The new plant will help Fonterra to deliver on its multi-hub strategy to get the maximum value out of every drop of milk and drive increased returns from the business," Ms Swales said.
"Importantly, the new plant will require significant growth of the local milk pool by 2020, and demonstrates Fonterra's commitment to growing the industry long term."
Victorian Agriculture Minister Jaala Pulford said the plant's construction, which is expected to be completed in 2017, would generate a further 75 jobs, injecting $10 million into the local economy through wages.
It came as the New Zealand government gave $NZ1.15 million ($1.05 million) to research and development company AgResearch to test the validity of health claims associated with a2 Milk's products.
The three-year study will include human clinical trials focusing on small intestinal inflammation and associated symptoms.
"The support of the New Zealand government to continue research into the advantages of a2 Milk is extremely important as there is a vast number of people, particularly in Asian countries, who are missing out on the health benefits of dairy because of a perceived intolerance," a2 chief executive Geoff Babidge said.
