SAURIN’s decision to purchase the long-neglected Longwarry dairy plant from Bonlac Foods in 2001 and transform it into a modern energy-efficient plant has won it an Environmental Solution of the Year award.
Rakesh Aggarwal, the Saurin Group’s managing director, accepted the award, thanking Manufacturers’ Monthly and sponsor Atlas Copco for recognition of this major upgrade.
"Longwarry Food is conscious of the environment and takes it seriously. We have implemented a range of measures to protect our environment," he said.
"We as a company are determined to save water and reduce carbon emissions in our production processes, whether there is a carbon tax or not."
Located in the regional part of Victoria, Gippsland, the plant had been closed since 1997 when Saurin bought it in 2001.
The plant was in poor condition, and according to Aggarwal, it was run down, using old technology, and was no longer economical to operate.
Since then, the plant has been upgraded from 2.3 million tonnes per hour of product to 4.3 million tonnes per hour, using in-house technology producing full cream milk powder, fat filled milk powders and a variety of dairy-based products.
According to Aggarwal, Saurin has increased production at the Longwarry plant by 300%.
"We have reduced our greenhouse gases by 25% and water usage by 40% on unit consumption basis. Our cost of energy has decreased from $122MT in 2005-06 to $97.50MT. This is despite significant increases in cost of energy from our suppliers," he said.
As part of its ongoing upgrade program, the company recently installed a fresh milk line under the Gippy brand, and will be promoted on the back of Gippsland’s clean and green image.
Longwarry Park also has a new UHT production line being installed, which is scheduled for commission this month.
At present the plant exports to 30 different companies around the globe. From a $1 million turnover in 2001 to 2002, it has grown to approximately a $75 million turnover in 2010 to 2011.
Surviving in a competitive industry, the company’s objective over the next three years is to grow the operation to be a $200 million business.
Saurin aims to achieve this by expanding plant capacity from 4.3MT/hr to 6.0MT/hr utilising newly installed milk bottle line for the fresh pasturised milk and the installation of sweet condensed milk plant to occur in this month (July).
Amongst its changes reduction in wastage, plant optimisation, water consumption reduction, energy conservation have been Longwarry’s regular targets.
"We have been successful at reducing all these year after year," said Aggarwal.
"We continuously invest in Research and Develop to improve plant efficiency, process automation and productivity," he said.
In one year, the company has successfully improved and completed several tasks which include; control of viscosity for improving plant efficiency, control glass transition point to reduce the dryer temperature, increase efficiency by optimising temperature and improving product wettability.
Ausindustry has granted Longwarry Park with a $500,000 grant to reduce energy consumption to match the best practice; the company anticipates completing this in 18 months.
Several challenges were faced when the changes were implemented, Longwarry noticed that the milk supply in Australia is declining and it currently competes with 13 companies for milk.
Despite this it has managed to grow its Compound Annual Growth Rate (CAGR) 30% in milk supply.
According to Aggarwal, milk powder is a commodity and the company has to manage the volatility of world markets.
Its solution is to have reliable customers and build long term contracts.
Aggarwal says the plant is being continuously upgraded and has achieved significant reduction in greenhouse emission.
"The 2008 BRW Award for Excellence in Environmental Practices, the Australian Greenhouse Office award for Environment and Energy Management and the SP AusNet Business award for Sustainability are recognition of Longwarry Food Park’s efforts," Aggarwal said.
What the judges said:
The judges said the decision to revive the plant and make it energy efficient has proved to be victorious. "Whilst competing with bigger industries, the Longwarry group are doing wonders," said the judges.
Saurin Group and Longwarry Park 03 9646 6771, www.longwarry.com