Clock ticking for UDP SA factories

Two major milk companies - Murray Goulburn Co-operative Co Ltd and Burra Foods - have bought assets in the sale but to date no buyer has been found for the two SA manufacturing facilities.

Soon after the announcements on Wednesday of the sale of its major cheese brand, processing equipment and Poowong facility and associated milk supply to the respective companies, UDP receivers PPB Advisory notified suppliers of their intention to cease production in SA.

Thirty six shocked SA suppliers received an email from receivers PPB Advisory informing them they had less than two days - until 5pm today- to find a new home for their estimated 40 million litres of milk.

About 100 jobs are at risk unless a buyer can be found within the next week or two.

UDP fell into administration last year after Hong Kong businessman William Hui, who bought the company just months earlier, failed to put extra capital into the business but no one expected such an abrupt end to production in SA.

An emergency meeting last night in Murray Bridge instigated by SA Dairyfarmers Association to find options was attended by more than 70 people and heard from four milk companies.

Lion stated it was not in a position to take on additional milk supply, B.-d Farm Paris Creek expressed interest in signing up more organic suppliers, Parmalat was able to take on extra volumes from the Fleurieu Peninsula and Murray Bridge areas, but Warrnambool Cheese & Butter has become the 'white knight'.

They have offered to take milk from UDP suppliers across the state until the end of the financial year at current prices and then negotiate with suppliers for the coming season.

SADA president David Basham is now comfortable all the milk will find a new home by the deadline for UDP collection this afternoon and particularly thanked WCB for their support of the industry.

"In the bad circumstances we were given the outcome we have got is the best we could ever have expected," he said.

"We will not have the short term competition we had but once things are resolved and other companies enter and take milk we will have more competition again."

As to the fate of the milk factories Mr Basham said he had been contacted by three potential buyers in the past 24 hours which was encouraging.

Their biggest concern was regaining milk supply.

"It does make it more problematic now the milk is gone but if we can get everyone in conversations with the receiver and then get them sitting down with us to talk about milk supply it might work out. There are also options to talk to WCB about processing it here rather than carting it to Vic."

Member for Hammond Adrian Pederick, who also addressed last night's meeting, is pleased the short-term milk issue has been resolved for dairyfarmers but is calling on the state government to step up to secure the factories' futures.

"I did a lot of work with Tony Esposito (UDP founder) when he first looked at the factories on government pay roll taxes and stamp duty exemptions but the government was not forthcoming and I understand some potential investors were looking for the same things."

"The government, to my understanding, has not sat around the table with the interested people for a really good discussion."

"I understand that they can't be seen to be favoring one party over another but the government at no less than the Ministerial level - so Minister Bignell - need to take this on and talk to all the interested parties as a matter of priority to keep the plants operational."

Mr Pederick said since the Olympic Dam project faltered the government had sprouted its clean and green food focus for regional areas but has done nothing about it in the background, and at the same time slashed agricultural research and development funding.

"Here is a chance for them to do something for the people of rural and regional SA."

"This is not just for the sake of my electorate and the jobs which I am very concerned about, but for the future of the dairy industry in SA," Mr Pederick said.