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					Investment Dossier




Value
Added
Dairy
Manufacture
in the Latrobe Valley
Gippsland, Australia
Introduction

The Latrobe Valley is a region unique in Australia
Providing around 85 percent of Victoria’s power needs, the linear structure of the
major towns, coupled with some of the most scenic country in the State, allows
a comfortable conjunction of town and country in a fashion that few other areas
can achieve.

Latrobe City, the third largest provincial city in Victoria, includes the major
towns of Moe, Morwell and Traralgon - each with a population of around
15,000 to 25,000 - as well as a range of smaller towns such as Boolarra,
Yinnar, University town Churchill, Tyers, and Yallourn North. Latrobe is also
the major population centre of the Gippsland region, with nearly 200,000
people within an hour’s drive.

The structure of the region provides a sizable regional population and centre,
with a diversity of business and lifestyle opportunities that suits most people.

The lifestyle options include everything from country living on a rural farm or
farmlet, through to urban-style living in a large regional town. For people used
to the slog of city traffic, often the best part is being able to combine a successful
business with a country lifestyle - with only 15 minutes or so of country driving
between the two.

The central location of Latrobe is also one of its key features. A double-lane
highway connects Latrobe to Melbourne in less than one and a half hours,
while the stunning Gippsland Lakes and Wilson’s Promontory regions are also
only an hour away to the east and south. To the north are the snowfields of
Mt Baw Baw and the history of towns like the fabled gold-mining centre of
Walhalla.

From a business perspective, the self-sufficiency developed to support the
industrial development during much of last century means that ancillary
services in this region are at an extremely high level.

Coupled with high level transport infrastructure designed to cope with large
loads, inexpensive property and a supportive local network of local government
and business, Latrobe is a prime option for major business investment.

This package outlines the opportunities available in Latrobe for business,
with detailed supporting information.

If you would like further information about support available, contact:
Invest Latrobe
Latrobe City Council
PO Box 345, Traralgon 3844
Victoria Australia
Telephone +61 3 5128 5717
1300 367 700 (within Australia)
email: invest@latrobe.vic.gov.au
www.latrobe.vic.gov.au


                                         Value Added Dairy Manufacture in the Latrobe Valley: 1
    Contents

    Centre for dairy production                                                      3
    Sites available                                                                  3
    Competitive advantage                                                            4
    Clusters and supply chains                                                       5
    Value added manufacture                                                          6
    Regional overview                                                                7
    Market factors                                                                   8
    Industry overview                                                               10
    Value adding                                                                    11
    New opportunities                                                               14

    SECTION 2: Latrobe
    Competitive advantages                                                            1
       q Transport

       q Support services

       q Weather profile

       q Rainfall/water availability

       q Waste disposal

    Housing                                                                          9
    Population                                                                      10
    Education                                                                       11
    Power availability                                                              13
    IT infrastructure                                                               14
    Workforce                                                                       15




                                         Surprising, substantial, diverse
LatrobeFirst is a strategic marketing campaign developed to promote the Latrobe Valley as a substantial,
diverse and surprising region.

The campaign is primarily focussed on educating individuals, business and government
agencies about what Latrobe has to offer.

The cornerstone of the LatrobeFirst campaign is the Ambassador program which encourages people
with an interest in the Latrobe Valley to advocate on behalf of the region in a positive way.

To find out more about the Latrobe Valley and the LatrobeFirst campaign log onto www.latrobefirst.com.au

Disclaimer
While the information in this report is provided in good faith, neither the associated consultants nor the author
warrant the accuracy of the information or assume legal responsibility for it, or any damage resulting from reliance
on or use of the information provided. Neither is the author, the Latrobe City Council nor the State Government
responsible for any negligence of the client or other persons with respect to use of any of the information.
The figures and costs included in this report are deemed to be correct at the time of writing but may be subject
to change and as such should be regarded as a guide only and need to be confirmed by prospective investors
or businesses.
The Latrobe City Council acknowledges the contributions of Nexus Consulting, the Gippsland Aquaculture Industry
Network Inc, Needham Public Relations Pty Ltd and the JRM Group in the research and preparation of these dossiers.


                                                         Value Added Dairy Manufacture in the Latrobe Valley: 2
A centre for dairy production
There is a perception that the Latrobe Valley is all about heavy industry and power stations - but that’s
not entirely true.
The Latrobe Valley has a substantial dairy industry, in terms of existing farms and particularly in relation
to potential for a value-added dairy manufacturing precinct. Already there is a major value-add factory
in the centre of the Latrobe City, the National Foods facility at Morwell. Perhaps even more importantly,
the National Foods site is surrounded by unoccupied industrial land, suitable for the future development
of more value-added industries to create a dairy industry, valued-added precinct.
A dairy manufacturing precinct is a defined area of land on which value added dairy manufacturing
factories are located conjointly with associated manufacturing, research and service industries. Such a
multi-purpose facility of this nature allows businesses with common interests to collaborate on issues
of mutual interest.
It is envisaged that a Gippsland dairy precinct might comprise:
1. Manufacturing facilities.
2. Premises for supporting firms that are involved in the dairy industry, eg stainless steel fabrication
    specialists, engineers, packaging and design, other service industry specialists - marketing, export
    agency, accounting, food safety, etc.
3. Regional research institute. The problem confronting the dairy industry appears to be the time taken
    to research new products through the industry body, Dairy Australia. Firms often want quick answers
    to ‘how to manufacture’ when seeking to introduce a new product to the market and staying ahead
    of the competition. The answer could lie in having an outreach regional research facility based in
    Gippsland within the value added dairy precinct, that could be used on a collaborative, yet competitive
    basis, by others within the precinct or by food manufacturing firms based elsewhere in the region.
4. Regional tourism showcase. This might include viewing areas of manufacturing processes, a
    refreshment outlet and a shop for purchase of local dairy and other regional produce. An excellent
    example of a showcase of this nature is the Heritage Centre at Bega Cheese, which attracts 250,000
    visitors annually.
The precinct is identified as being suitable for multi-purpose value adding dairy products and co-products.
These might include traditional products such as cheese, whey powder, butter, yoghurt and ice cream, or
niche products or co-products that may have everyday consumption and/or industry or biotechnological
applications over time.




Sites for Value Added Dairy Manufacture
Latrobe Valley Advantages
The Latrobe Valley as the established centre of Gippsland’s thriving dairy industry offers some significant
advantages in terms of infrastructure and also importantly in location. The sites recommended by the
Latrobe City Economic Development Unit, Invest Latrobe, as being suitable for the development of a
value added dairy manufacturing precinct are:
q The facility and land previously owned by Tambo Valley Cheese at Traralgon;

q Land on the Princes Highway between Alexander Road and the National Foods factory at Morwell.

There is good proximity to key markets, excellent transport links, industry infrastructure already in place,
and of vital importance, large sources of skilled and unskilled labour. Sources of power - electricity, steam
and natural gas - are the equal of those anywhere in Australia.
For dairy products, the lush pastures of Gippsland retain the image of clean, green Australia,
which has been so successfully marketed overseas by other dairy and primary product producers.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 3
Suitable sites
Tambo Valley Cheese Facility
Located on the Princes Highway, Traralgon
The available land and existing facility is located on a slip road exit off the Princes Highway just before
the entrance to Traralgon town from Sale. The land has a slight slope down to the easement before
the light industrial site on the highway.
The land is currently zoned ‘Industrial’. The City of Latrobe Economic Development Unit has advised
that there should be no restrictions, from a planning perspective, for any value added dairy
manufacturing facility.
Electricity and gas are already available for connection. The same applies to Gippsland Water for supply
of water and wastewater and sewer services.


Land between Alexander Road and National Foods
Located on the Princes Highway, Morwell
This site is located on land adjoining National Foods adjacent to Princes Highway, Morwell.
The available area is located on the western side of the National Foods facility. The site can
be accessed from the Princes Highway, and has potential rail access.




The Competitive Advantage
The potential for value added dairy manufacture in the Latrobe Valley can be developed beyond the
establishment of new manufacturing facilities operating from either the land adjacent to National Foods
at Morwell or the premises of the former Tambo Valley Cheese factory at Traralgon.
It is envisaged that a Value Added Dairy Precinct incorporating a core of companies working both in
collaboration and competitively will create significant operational, financial, human resource, innovation
and marketing advantages for each entity.
The sites which contains the former Tambo Valley Cheese processing, cool storage and office/showroom
facility at Traralgon also has the potential for reduced power costs, waste water and sewerage available,
and off-road access, providing a further advantage.
The Valley has access to natural gas and has a skilled labour force available.
The area is close to Melbourne and has excellent transport and infrastructure services.
Latrobe City Council has plans to expand and improve this by the development of a container handling
and warehousing facility at the Maryvale Public Siding adjacent to the Gippsland railway and Princes
Freeway.
The facility, known as the Gippsland Intermodal Freight Terminal (GIFT), provides a container
handling capability lacking anywhere in Gippsland, a focus for industry logistics in the Latrobe Valley
and surrounding hinterland; and the beginnings of an ‘inland port’ able to perform Customs and AQIS
clearances for export commodities.
Latrobe Regional Airport offers a high level of customer amenity, with a modern terminal building and
recently upgraded passenger carpark. It is serviced by two car hire operators, taxis and is minutes away
from quality accommodation. There are plans through the aviation cluster in the airport precinct for
improved air services to capital city destinations and for additional freight handling.




                                                     Value Added Dairy Manufacture in the Latrobe Valley: 4
Municipal Planning Scheme and Environmental Conditions
Latrobe City Council
Invest Latrobe is very supportive of industry development and would assist in the development of
additional value added dairy manufacturing industry in the City. Invest Latrobe would assist in the
selection of land, securing services and infrastructure requirements, while DPI officials can assist with
a wide range of industry information. Officers in the Planning Department of the Latrobe City Council have
indicated that they would, subject to appropriate approvals being obtained, support such developments.


Community Perceptions
There have been no studies undertaken to assess community perception of value added dairy
manufacture in the Latrobe Valley. However, it has been an extension of traditional dairy farm activities
since the area was first settled.
Given that the sites outlined above are zoned industrial, it can be assumed that adequate public
consultation was undertaken at the time the Planning Scheme was prepared and that developments
such as value added dairy manufacturing precincts should not have any adverse community perceptions.




Clusters and Supply Chains
Cluster arrangements, such as a value-added dairy precinct, can allow milk producers and processors to
share common inputs and management issues. Incentives such as the National Food Industry Strategy
Food Chain Program encourages businesses involved in a cluster, network or supply chain to develop
food industry skills, capability and knowledge in value chain management.
The concept of a dairy cluster is that highly specialised companies within the same industry in a
geographical proximity - dairy farmers and primary processors - will create intense interaction though
formal and informal networks, tight supply chains and new firms spawning. There will be strong rivalry,
yet cooperation, and trust.
For further information about clusters see the website of the principal clustering organisation in Australia
at www.clusternavigators.com.
Cluster members in a value added dairy food chain might include primary producers, producer networks,
cooperatives, providers of input and services, food processors, manufacturers, marketers, designers,
packers or distributors, transport and logistics businesses, retailers, food service providers and customers.
These production systems meet market demands for safe high quality food, overcome production
variability issues and cluster precincts avoid urban/farming interface issues.
The industry suggests that there are opportunities for value added dairy manufacture and that the
industry will continue to find paths for expansion and development into export and domestic markets.
However, any development must not be on a speculative basis but must be market driven.
The development will not entice new or existing manufacturers unless there are market opportunities and
a clear value chain. There may be opportunities to supply existing markets or the development of organic
and nutriceutical/functional food type products. There are business opportunities for corporate investors
or for the development of new enterprises or the relocation of existing ones.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 5
Value Added Dairy Manufacture
Dairy Production
According to the European Commission, in the medium term overall developments in dairy markets
would appear to be quite favourable. Domestic demand for cheese is projected to rise, though at rates
below the recent long-term trend. The same holds for fresh dairy products, where expected growth rates
are even stronger.
Production responses in both sectors would lead to an increased demand for raw milk, which due to
the quota regime would then no longer be available for the production of bulk products, in particular
skim milk powder (SMP) and butter.
Domestic demand for SMP is projected to fall, due to a reduction in animal feed use, and so would
production. In the case of butter too, internal consumption and production would decrease, although
here the reduction in consumption would only be quite small.
In Europe and the US dairy supply chains and clusters have been established with numerous advantages
obtained through sharing of common resources.
In Australia the pattern of milk production altered following deregulation in 2001. Australian dairy
companies continue to increase processing capacity to keep pace with growing milk output, while
improving efficiency and economies of scale.
Cooperatives dominate the industry, accounting for about 75% of all milk output. The three largest -
Murray Goulburn Cooperative Limited, Bonlac Foods Limited and the Dairy Farmers Group - account for
over 60% of all milk intake, and over 70% of all milk used for manufacturing.
There are several multinational dairy companies - including Fonterra (which owns 50% of Bonlac),
Nestle, Kraft and Parmalat. Meiji and Snow Brand have also set up operations in Australia, closely tied
to local cooperatives. Other Australian dairy companies cover a diverse range of markets and products,
from the publicly listed National Foods Limited, to highly specialised farmhouse cheese manufacturers.
Bonlac, Murray Goulburn and National Foods have processing plants in Gippsland.
The four major production streams are butter/skim milk powder, casein/butter, cheese and whole milk
powder. In line with international trends, there has been a general movement in Australia’s product mix
toward increased cheese and whole milk powder production, and away from butter and skim milk
powder lines in recent times.

Dairy Education, Research and Development
Dairy Australia includes an R&D development business working on behalf of, and funded by,
the Australian dairy industry and the Federal Government.
The Department of Primary Industries (DPI) Dairy Research Institute located at Ellinbank, just west of
the City of Latrobe, conducts research and extension relevant to pasture-based industries in southern
Australia, particularly the dairy industry. The Institute offers:
q Research commissioned by the Department of Primary Industries (DPI), by rural industry research

  corporations such as Dairy Australia, and by commercial companies such as Bonlac.
q Laboratory testing for DPI in-house testing for projects, commercial contract testing of soils,

  waters and pastures, and access to testing services offered by DPI including the sale of soil
  and feed testing kits.
q Farmer services.

The University of Melbourne established the McMillan Institute of Land and Food Resources in 1976 to
service the education and training needs of the rural community of Gippsland. Courses are conducted
whenever they are needed and are serviced from McMillan’s three centres in Gippsland - Warragul,
Leongatha and Maffra. The Advanced Diploma of Agriculture (Dairy) is Australia’s first extensive University
program that develops practical skills and theoretical foundations while providing support for personal
growth as a successful dairy farm manager and industry leader. Other courses are conducted on an
outreach basis.




                                                   Value Added Dairy Manufacture in the Latrobe Valley: 6
Regional overview
Dairy Industry in Gippsland
Victoria produces almost 7 million metric tonnes of milk per year, 60% of Australia’s total.
Around 1.8 billion litres (1.7 metric tonnes) of milk comes from the dairy farms that form a patchwork
across the lush green hills and valleys of Gippsland.
Gippsland dairy industry production grossed $415m, 26% of total Victorian dairy revenue, in 1998-99.
Most of this occurs in the west of Gippsland, especially the sub-region bounded by Drouin, Inverloch,
Foster and Moe, and in the Gippsland Irrigation District around Maffra. Smaller districts include Yinnar
and Flynn.
Gippsland has a thriving, stable dairy industry primarily based on a herd of 413,000 dairy cows in
2606 licensed dairy farms. The main production areas of Gippsland dairy production are West Gippsland,
South Gippsland, Gippsland Irrigation and East Gippsland. Most of the figures provided here are based
on all those districts and are taken from Dairying for Tomorrow, a CD produced by the Dairy Research
& Development Corporation (now Dairy Australia).
The value added dairy industry in Gippsland is significant. Within Gippsland this includes 11 processing
plants and three major companies - Bonlac, Murray Goulburn, and National Foods. It also includes the
Department of Primary Industries Dairy Research Institute at Ellinbank and the Macalister Research Farm
Cooperative at Maffra.
The major markets supplied from Gippsland include Melbourne and Sydney with products exported
by many of the existing dairy manufacturing companies in the region. This includes a supply chain
improvement project whereby several of the smaller specialty cheese manufacturers have linked with
the export facilitation company, Dairy Marketing International Pty Ltd.




Gippsland Dairy Statistics
Industry distribution: Across the South Gippsland (43%), West Gippsland (30%),
                       Gippsland Irrigation (24%) and East Gippsland (3%) districts.

Milk production: 1881 million litres in 1998/99 (19% of national production).

Farmgate value: $575 million.

End use: Nearly all production (92%) is used for manufactured products.

Value of dairy products exported from the region: $1.2 billion in 1998.

Average annual rainfall: 600-1,200 mm across the region.

Water use: Irrigation water is sourced from various surfaces and with supply significantly, but not fully,
           committed. There are 23 groundwater areas, 15 of which are used above their allocation
           cap. All water accessed requires a license and transferable rights apply to surface water
           entitlements, although few dairy farmers are currently trading water. Average irrigation
           requirements vary between years, at 4-9 ML/ha and average stocking rates are presently
           2 cows/ha.

Recent trends: Regional milk production has increased by 3.3% a year in recent years, with the
               number of farms declining 1.2% and farm herd size and production per cow both
               increasing by 7.9% and 2.8% a year, respectively.

Average regional milk production: 4600 litres per cow.



                                                    Value Added Dairy Manufacture in the Latrobe Valley: 7
                Market factors
                Markets for Australian Dairy Products
                Australia accounts for an estimated two per cent of world milk production but it is an important exporter
                of dairy products, ranking third in terms of world dairy trade, and accounting for 16% of all dairy product
                exports.
                As Australian milk output is expanding at a faster rate than domestic consumption, an increasing
                proportion is destined for export markets. Australia now exports over 55% of its annual milk production
                as world demand for Australian dairy products has risen rapidly in recent decades. Annual exports of
                900,000 tonnes of processed dairy products are shipped to over 100 countries and earn $3 billion in
                revenue.
                Sixty-six per cent of Australian exports are concentrated in Asia/East Asia. Japan, the most important
                export market to Australia, accounts for nearly one-fifth of Australia’s exports by value. This reflects both
                Australia’s natural geographic advantage in these markets and its exclusion from other major markets
                by direct restrictions (EU and USA) or by the impact of export subsidy programs of major competitors.
                The Australian dairy industry can achieve even greater growth as world demand for high-quality dairy
                products and ingredients continues to expand. Export growth and improved international prices are
                a key to the local industry’s long term prosperity.


                                                                                    July - June
                                   Tonnes                    2001/02                 2002/03               % change

Export Report                 Butter/AMF                      107,195                 99,414                   -7%
June 2002                           Casein                     13,107                 20,415                   56%
                        Cheese - cheddar                       92,491                 101,047                  9%
                           Cheese - other                     125,089                106,706                  -15%
                                      Milk                    86,854                  88,264                   2%
                                SMP/BMP                       224,426                195,429                  -13%
                            Whey Powder                        44,377                 77,760                   75%
                                     WMP                      213,295                198,322                   -7%
                     Other dairy products                      24,784                 38,401                   55%

                                                              931,619                925,758                   -1%


                                                                                    July - June
                               Value $AU                     2001/02                 2002/03               % change

Export Report                 Butter/AMF                   296,326,304             220,608,497                -26%
June 2002                           Casein                  121,933,065            126,749,299                 4%
                        Cheese - cheddar                    467,355,270            390,644,918                -16%
                           Cheese - other                   564,327,688            404,510,516                -28%
                                      Milk                  98,096,470              98,126,559                 0%
                                SMP/BMP                     734,757,070            429,839,323                -41%
                            Whey Powder                     76,554,995              84,936,411                 11%
                                     WMP                    791,820,838            611,786,684                -23%
                     Other dairy products                   94,785,580             119,468,402                 26%

                                                          3,245,957,280           2,486,670,609               -23%

                AMF: anhydrous milkfat                 SM: skim milk powder
                BMP: buttermilk powder                 WMP: wholemilk powder


                                                                     Value Added Dairy Manufacture in the Latrobe Valley: 8
The stability of Gippsland milk production is on average better than any other region of Australia.
Records kept between 1993 and 1999 show increases in:
q Milk production of 3.3%;

q Dairy cows of 8.4%;

q Cows per farm of 7.9%;

q Production per cow of 3.7%; and

q A reduction in farms by 1.2%.

This alone bodes well for any intending dairy manufacturing company considering entry into the region.
Dairy Australia’s forecast for the future of the dairy industry in Australia includes the statement:
Total industry milk production could increase 70-80% by 2010, with a then average herd of 250-300
cows producing between 5500-7000 litres per cow.
The average dairy herd size in Gippsland is 155 cows, each producing 4554 litres of milk per annum.
In terms of labour, Gippsland farms and processing plants are the most efficient in Australia. Each on
farm labour unit produces 365 ML of milk per annum, while in the processing sector, each labour unit
processes 2.2 ML.
Anecdotal information indicates a movement of farmers from the northern irrigation districts of Victoria
into Gippsland. It is anticipated that the number of farms will keep falling, but those remaining will be
larger, and more efficient. Therefore, the conclusion can be drawn that Gippsland farmers will succeed
in increasing production faster and more efficiently than dairy farmers in most other regions of Australia.
Milk is mainly produced seasonally in Gippsland, peaking in September-October and falling in June-July.
During winter months, the milk supply is usually lower in Victoria, and reflects producers’ response to
poorer pasture conditions in adjusting supply to maximise net returns.


Land Suitability
Blessed by a climate and geography that recall the legendary cheese-making regions of Europe,
Gippsland has rich soils and a high rainfall; combined with abundant sunshine, fresh pure air and clear,
mountain water, it provides lush pastures for dairy cows and milking goats.
After a cold wet winter comes the first flush of spring, followed by the flowering period of early summer.
A hot summer, then autumn once again greens the pastures.

Climate
Gippsland has a unique climate with high rainfall production areas in the West and East Gippsland has
an extremely mild climate which allows year round production of a range of vegetable crops. Bairnsdale
in the East has a mean maximum temperature in January of 24.6 degrees and in July 13.8 degrees,
with an average annual rainfall of 698mm. West Gippsland has a mean maximum temperature in
January of 23.5 degrees and in July of 12.4 degrees with and average annual rainfall of 1113.8mm.


Strengths/Opportunities
q   Moderate climate with a mild summer and high rainfall.
q   High water quality in rivers and groundwater.
q   Opportunity for multi-function production areas within precinct.
q   Good proximity and access through excellent regional road, rail and air freight infrastructure to
    domestic markets and export facilities.
q   Other dairy and primary produce food processing facilities are located in the region
    (National Foods, Murray Goulburn, Burra Foods, Jindi Cheese, Bonlac, Tarago River Cheese, Vegco,
    Pure Harvest, Patties, etc.)




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 9
Industry overview
The Australian dairy industry is one of Australia’s major rural industries, with more than $3.7 billion
in 2001-02.
Dairying Today, a CD from Dairy Australia provides a summary of key industry features and some future
needs. Although this dossier is focused on value adding dairy manufacture, dairy farmers are the primary
source of milk supply within the supply chain. The two industry development features outlined below
provide those involved, or intending to be involved with value adding to gain a better understanding
of primary producer issues that may also affect them.

Industry Development Features
Future
Production
q Total industry milk production could increase 70-80% by 2010, with a then average farm herd of

  250-300 cows producing between 5500-7000 litres per cow probable. This is potentially achievable
  through farm intensification and amalgamations.
Future Growth
q Consistent projections for all of the dairy regions are that there is little need for additional land
  or water for achieving increased production.
Dairy Outlook
The following statistics are provided through the Australian Bureau for Agricultural and Resource
Economics (ABARE):

                                                                          s               f

                                                      2001-02         2002-03        2003-04        % change

          Cow numbers                   ‘000           2 123           2 052           2 064              0.6
              Milk yields              L/cow           5 309           5 030           5 058              0.6

            Production:
              Total milk                 ML            11 271          10 322         10 440              1.1
          - market sales                 ML            1 916            1 916          1 923              0.4
        - manufacturing                  ML            9 355           8 406           8 517              1.3
                   Butter                 kt             164             155            166               7.1
                 Cheese                   kt            431             364             360               -1.1
                   WMP                    kt            239              188            180               -4.3
                    SMP                   kt            261              179            194               8.4
               Milk price               Ac/L            33.0            29.5            29.1              -1.4

       Value of exports                 A$m            3 196           2 377           2 463              3.6

          World prices:
                 Butter                 US$/t          1 127            1 186          1 187              0.1
                 Cheese                 US$/t          1 988           1 775           1 804              1.6
                    SMP                 US$/t          1 625           1 587           1 639              3.3

                                                                                               s: ABARE estimate
                                                                                                f: ABARE forecast




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 10
Effects of Deregulation
The dairy industry has undergone and is still going through significant change following deregulation.
Individual producers have increased in scale and technology. The domestic market is fully supplied and in
almost all areas of primary production there is a trend towards the production of value added products.
The states most adversely affected included NSW and Queensland, while Victoria continues to dominate
the industry.
The trend in Victoria following the full effects of deregulation, as in other states, is for the number of farms
to fall while farm and herd sizes grow as production efficiency increases.

Milk Producers
Victoria is very much the dominant dairy state in Australia. In 2001-02, there were 7079 registered
dairy farms in Victoria from a national total of 11,022. Of the other states, NSW had 1323 farms and
Queensland, 1152 farms.
Victoria at 30 June 2002, was home to 1.52 million dairy cows out of the 2.37 million national herd.
The annual milk yield per cow was:

   Victoria                    4872 litres

   Australia                   4758 litres

   NSW                         4712 litres

   Western Australia           5458 litres

The dominant breed in Australia is the Friesian Holstein, accounting for over 70% of all dairy cattle.
Other important breeds include the Jersey, and Australia’s own breed, the Illawarra. Most breeding is by
artificial insemination, giving Australian farmers access to some of the best genetic material in the world.
Herd recording is widely practiced, with an estimated 70% of farms regularly recording herd performance.
Genetic evaluation of dairy cattle is conducted by the Australian Dairy Herd Improvement Scheme (ADHIS)
using one of the most sophisticated evaluation systems in the world. Improved herd genetics, as well as
advances in pasture management and supplementary feeding regimes, have seen average annual yield
per cow increase from 2850 litres to 4760 litres over the last two decades.




Opportunities for Value Adding
Existing Dairy Industry Infrastructure
Bonlac
Bonlac Foods’ dairy-based ingredients are widely used in the manufacture of many Australian
and internationally renowned brands across a broad range of consumer goods such as ice-cream,
chocolate, confectionery, infant formulae, dairy beverages, nutritional products, processed cheeses
and bakery products
In collaboration with leading academic and scientific organisations, Bonlac’s Bioscience division
is dedicated to researching, developing and marketing new milk-derived products that can be used
as natural, health-enhancing ingredients in foods, confectionery and beverages. The first commercialised
product is a complex of casein phosphopeptides and amorphous calcium phosphate, marketed
as Recaldent™ (patent owned by University of Melbourne), which remineralises tooth enamel.
Its first commercial use was in chewing gum marketed in the USA, Europe and Japan.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 11
Murray Goulburn
Murray Goulburn Co-operative, the largest co-operative dairy company in Australia, manufactures
Devondale dairy products. It collects more than 30 per cent of Australia’s milk production. Two of the
company’s seven factories in Victoria, at Maffra and Leongatha, are in Gippsland. It also has 26 trading
stores providing animal health care products, machine parts, fertiliser and pasture stock.
Murray Goulburn has introduced a system of cheese making which has enabled a product to
contain only 7% fat. This has been an important breakthrough for people with dietary restrictions.
The company has imported new technology to mix butter and vegetable oils into a dairy spread that
also can be used successfully in cooking. The company has also been a leader in the development of
the Ultra High Temperature (UHT) or Longlife system.

National Foods
National Foods is one of Australia’s largest, publicly listed, food companies, processing milk, fresh dairy
foods and specialty cheeses. The Latrobe City’s Economic Development Unit, Invest Latrobe, negotiated
with the company to establish a plant at Morwell. Land adjoining this site has been identified as being
suitable for the development and expansion of a dairy precinct incorporating value adding manufacture.
The company is the only truly national market milk company in Australia. Its flagship Pura brand is
manufactured and sold in all states. The company is a market leader in fresh milk and produces a range
of full cream, flavoured and modified fresh and UHT milks, yoghurt, fromage frais, dairy desserts, cream
and processed cheese, and premium specialty cheeses under brands such as King Island Dairy, South
Cape, Tilba, Timboon and Clover Creek.

Jindi Cheese
Jindi Cheese was founded in 1985 on a family owned farm at Jindivick and has grown to become
one of Australia’s leading producers of hand-made white mould cheeses.
The ultimate accolade in the cheese-making world was awarded to the Jindi Brie for ‘the Best Soft
Cheese in the world’ at a recent Wisconsin Cheesemakers’ World Championship Cheese Contest.
Jindi Cheese produces Brie, Camembert, Triple Cream Cheese, Jindi Supreme, Jindi Classic Camembert
and Jindi Traditional Brie.

Tarago River Cheese
Tarago River Cheese factory at South Neerim manufactures cheese from 800 cows on two farms
and employs 45 people. Pure Jersey and goat’s milk are collected from nearby farms. Each kilogram
of cheese requires 7-10 litres milk.
The first cheese to find fame was Gippsland Blue, followed by a Gorgonzola-style, a range of
blue cheeses including Royal Victorian Blue, a Stilton-style; Shadows of Blue, similar to Blue Castello;
and Blue Orchid, a Roquefort-style. Tarago also makes a traditional Brie and a Gippsland Brie,
a hard matured cheddar-style Tarago Mature and Tarago Lavender. Cheeses from goat’s milk,
and a new mild washed rind - Jensen’s Red, similar to Port Salute, are the latest additions.

Burra Foods
Burra Foods at Korumburra exemplifies the type of multi-function value adding that could be incorporated
into a value added dairy manufacturing precinct. Manufacturing and product development focuses on
fresh dairy ingredients. The company uses world class technology to convert a low value commodity into
value added ingredients - cottage cheese, cream cheese, quarg, mascarpone, milk preparations including
ice cream mix, sweet cream and yoghurt.
By arrangement, farmers that supply Burra Foods manage their herds and milking programs to maintain
continuity of supply all year round, including the low yielding winter months. “Some of our farmer
suppliers are certified ‘A Grade Organic’ by the Biological Farmers Association and Biodynamic
Agricultural Association of Australia, allowing us to produce specialised organic products accordingly.”




                                                   Value Added Dairy Manufacture in the Latrobe Valley: 12
Maffra Cheese Company
After three generations, cheese is still made by hand on Maffra Cheese Company’s dairy farm near Maffra.
The company makes a premium clothbound range - Vintage Cheddar, White Cheshire and Red Leicester;
and traditional waxed cheeses - Sage Derby, Dargo Walnut, Peppercorn Cheddar and Wensleydale.
“Our philosophy is simple - the best cheeses must start on the farm. For this reason cheesemaking
is...an extension of life as a farmer and inextricably entwined with our stewardship of, and respect for,
the land.”

Riviera Ice Cream, Lakes Entrance
The Riviera ice cream business is based on a 400-acre family farm at Lakes Entrance, whose owners
decided to pursue value adding rather than supply milk. The Riviera brand is widely acknowledged
to be of very high quality, particularly vis-a-vis the major brands which use less butterfat, which affects
the taste.
Riviera intends to expand its Rosedale operation by shipping ice cream in bulk, extruding it into
different shapes and packaging it there. The company has also expanded into yoghurt and fetta
cheese manufacture.

Bow’s Natural Ice Cream
This boutique ice cream manufacturer makes and sells ice creams made with fresh local milk in
the Mid Valley Shopping Centre in Morwell. This award-winning ice cream is available in more than
30 flavours.

Top Paddock Cheese
The Leppin family started manufacturing traditional English regional-style cheeses using milk
from their property at Bena. They progressed to washed rind cheeses and a Havarti range.
Recently Top Paddock Cheese was purchased by Jindi Cheese.

Faudel Goat Cheese Company
The Faudel Goat Cheese Company at Korumburra was established in 1993 to help satisfy a
growing demand for good quality goat cheese. Rod Faudel is a true goatherd, tending his 100 goats,
milking them and producing exquisite cheeses in the ancient tradition of Europe.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 13
Potential Value Adding opportunities
Organic Products
Gippsland has the potential to be the cornerstone for the development of Australia’s organic dairy
industry. Organic dairy products are a niche market and are fragmented, but expect this to change
as Australia follows the lead of other countries, where organic foods can comprise a third of the total
market.
South Gippsland Shire Council sponsored a pre-feasibility study for Fish Creek organic milk producers.
This revealed a domestic demand from a chain of fast food restaurants for organic milk, cheddar cheese
and butter. Regional Development Victoria has sponsored further activities including a business plan for
the newly formed organic dairy farms cooperative.
The value of organic production has grown in Australia from $28 million in 1990 to $250 million in 1999.
In 1995, only 1% (approximately 335,000 ha) of all Australian agricultural land was used for organic
farming however this figure increased to almost 7 million hectares of certified organic land in 2000.
The purchase and consumption of organic food products has increased an average of 15% over the past
decade. Better-educated consumers are understanding more about production and processing of food
products. They know more about the need for healthier diets and are now demonstrating a preference
for products that have fewer chemicals or synthetic additives in the products or that have no genetically
modified (GM) ingredients.
This has led to consumers becoming committed to the environment and the ethics of production.
Simply stated, the ethics involve the farmers receiving a fair return for their effort in engaging in
sustainable agricultural practices and manufacturers/processors that have a commitment to the
production of healthier products. These consumers are prepared to pay more for organic products.
Recent studies have shown they are prepared to pay a premium up to 20% above the normal price.

Ice Cream
Australians rate as the third highest consumers of ice cream in the world after the US and New Zealand,
with an average consumption of 17.8 litres annually.
The types of ice cream based on the milk fat content of ice cream are:

Regular ice cream (10 - 12% milk fat).

Reduced fat ice cream (no more than 6.5% milk fat).

Low fat ice cream (no more than 4% milk fat).

Soft serve ice cream. Similar in composition to reduced fat ice cream, soft serve is aerated and frozen
immediately before sale. It has a frozen but softer texture than traditional ice cream.

Dairy gelato (5-10% milk fat content) is an Italian-style ice cream with a creamy texture and intense fruit
flavour. This recipe is based on the Italian gelato, which is a water-based flavoured ice confection.

The principal ice cream franchise operations in Australia include Baskin Robbins, Andersen’s of Denmark,
New Zealand Natural, Royal Copenhagen, Frosty Boy, Mr Whippy and Wendy’s.
None focuses specifically on organic products, although several have an image of being natural,
quality products. An organic ice cream franchise operates through Ben & Jerry’s in the US, Canada,
Mexico, throughout continental Europe, Iceland, the UK, Lebanon, Israel, Singapore, Hong Kong
and South Korea.
No major organic franchise exists in Australasia.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 14
The following information relates to ice cream trends in the USA:

Vanilla is the flavour of choice in ice cream and novelties, in both supermarket and food service sales.
It is the most versatile, mixing well with toppings, drinks and bakery desserts. The top five favourite
individual flavours in 2001 in supermarkets were vanilla, chocolate, neapolitan, butter pecan and
chocolate chip.

Processors continue to offer new lines of lower fat frozen desserts, including new ‘no sugar added’
products.

The ‘swing back to indulgence’ means premium and super-premium quality ice creams in innovative
flavours and with such mix-ins as cookies, brownies, candies and cake continue to outsell regular ice
cream.

Another important trend is the continuing popularity of co-branding, which involves partnering with
successful branded companion products for increased product awareness. New ice cream products
use ingredients from well-known candy, cookie, fruit and flavouring manufacturers. Ice cream
manufacturers have teamed up with popular coffee and chocolate brands. Market signs indicate
that this trend will continue to be important in the future.

Milk Peptide Derivatives
Murray Goulburn is investigating technical and marketing issues associated with commercialisation
of a new functional food ingredient based on milk peptides, supported by an NFIS Food Innovation
Grant from the Commonwealth (AFFA).
The University of Melbourne is investigating antimicrobial peptides derived from milk proteins.
This is relevant to industry as these peptides have potential for use as natural food preservatives,
                                            shelf-life extenders and for therapeutic purposes. Lactoferricin B
“Milk Peptides: Exciting new                has shown promise as a food preservative because it is effective
reasons to drink milk. Milk is              against a wide range of food-borne pathogens and organisms
another example of a food that              responsible for food poisoning. As antimicrobial peptides are
can impact positively on our                derived from milk proteins, which are safe to consumers, the
health and disease fighting                 safety of anti microbial milk peptides should not be a concern.
mechanisms in the body”
                                            MTT Agrifood Research is the largest research institute in Finland,
   www.medicinalfoodnews.com                and one of the largest institutes in Nordic countries carrying out
                                            agricultural and food research. It is also one of the first research
institutes in the world to successfully produce a cheese containing millions of living, probiotic lactic acid
bacteria. Known as Festivo, this is also the first cheese in the world which researchers have been able
to induce to produce higher than normal amounts of bioactive blood pressure-lowering peptides during
the production process. As part of an EU-funded project, MTT studied the influence of the proteolytic
system of Cheddar and Gouda culture strains on the maturing process. Genetically modified culture
strains survived well in trial conditions similar to those met in the maturation of Cheddar cheese.

Whey Protein
MTT, with the University of Helsinki and Valio, has separated bioactive peptide fractions from
whey proteins to develop new edible coatings for extending the shelf life of fresh vegetables.
(This may be significant for Gippsland, which has a $93 million horticultural industry.)
These bioactive peptide fractions could have considerable health effects in addition to their
nutritional properties. For example, development and dietary use of dairy products and other foods
containing blood pressure-lowering peptides could perhaps lower the risk of cardiovascular disease.
MTT’s research aims to develop industrial applications for enriching bioactive peptides and to find
products to which enriched peptides can be added.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 15
Specialty Cheeses
Every two years Dairy Australia, in conjunction with the Australian Specialty Cheesemakers’ Association
(ASCA), surveys specialist cheesemakers to enable the publication of a report on this growing sector in
the dairy industry.
The growth in this sector will continue as the domestic market continues to expand and export markets
open up.
The survey provides information about a sector of the industry that has seen huge growth over the past
ten years. Specialty cheese production has grown from around 15,000 tonnes a year to just over 31,000
tonnes in the last decade. The information supplied in the returned survey is compiled and analysed to
provide a comprehensive report that, in turn, is only available to the participating cheesemakers. Other
information gathered in the survey will contribute to a planned new edition of the popular Australian
Specialist Cheese Handbook.

Other Applications
Gippsland has sufficient milk to cater for the needs of any new dairy value adding manufacturing
enterprise to the region. Applications other than those outlined above might include state-of-the-
art membrane concentration, spray drying, and a wide range of milk-based products at competitive
prices to potential downstream value adding activities - cheese cakes, sauces, dried soups - the
opportunities are limitless.




                                                 Value Added Dairy Manufacture in the Latrobe Valley: 16
Regulations and responsibilities
Regulations and Responsibilities for
Water and Waste Disposal/Management
Gippsland Water has indicated that typical tariffs are 20-30 cents/kilolitre for raw water and
54-56 cents for treated water. There would be fixed charges to connect water to a suitable site.
The cost for this would depend on the size of the required service, and if necessary, the distance from
the existing service. The contact person at Gippsland Water is Mr Roy White, telephone (03) 5177 4630,
mobile 0417 562 014, email Roy.White@gippswater.com.au.
Wastewater and sewer services are available in most areas of the City of Latrobe. The typical charges for
wastewater are 80-90 cents/kilolitre. It may also be necessary for a facility to enter into a trade waste
agreement, depending on the waste. As with water, a fixed charge would apply for connection to the
system. Mr Roy White, Gippsland Water, is again the person to contact.
The Tambo Valley Cheese site at Traralgon is already serviced, and reconnection applications would apply.


Availability and Cost of Natural Gas and Electricity
As a guide, TXU Electricity has indicated that the approximate cost for equipment and connection
of 200-300 KVA power, one pole and a transformer would be in the vicinity of $40,000.
As with water, there may be charges to enable the transfer to a suitable site from an existing
power source. Connection information can be accessed through the TXU Service Centre,
telephone 1300 360 795.
The supply of natural gas is available across different areas of the municipality.




                                                    Value Added Dairy Manufacture in the Latrobe Valley: 17
                 Key competitive advantages for value added dairy production in the Latrobe Valley are an identified site,
                 which is close to ready, reliable, low cost energy sources and to established raw milk supplies.
                           Strength                    Weakness                 Opportunity                    Threat
SWOT Analysis     Herd and raw milk quality      High capital cost         Cluster development         Australian dollar
of value                                         of specialty, often       precinct - central          fluctuations in
Added Dairy                                      overseas, technology      production area             commodity markets
Manufacture                                      and equipment             with critical mass
in the
                  Gippsland has a strong,        Labour costs              Planning with               Downturn of
Latrobe Valley
                  experienced, established                                 specialised precinct        world economy
                  dairy industry                                           no urban/farming
                                                                           interface
                  Technology exists              Recruitment               Proximity to sources        Increasing
                                                 of executives             of energy                   energy costs

                  The product is high            Industry still changing   Close to good               Competitive
                  quality and reliable           due to deregulation       labour source               demands for local
                  in supply                                                                            milk supply

                  Industrial sites available -   Existing R&D systems      Flow-on from dairy          Production in
                  particularly former Tambo      for rapid development     deregulation closures       other regions
                  Valley Cheese factory          of new products           in other regions

                  Good labour                    Lack of technical         Close to Melbourne          Imported products
                  availability both skilled      advice/knowledge
                  and unskilled
                  General industry               Market opportunities      Good transport              Major outbreaks of
                  infrastructure exists in       need to be identified     infrastructure -            disease in dairy cattle
                  the Latrobe Valley                                       road, rail, ports, air

                  Gippsland is poised                                      Availability of Tambo       Milk contamination
                  to go to next levels                                     Valley Cheese factory
                  of innovation                                            and Morwell sites
                  Proximity to power and                                   Lower capital cost
                  waste water disposal                                     due to availability of
                                                                           existing building
                  Access to quality water                                  Other industrial sites
                  in good quantities                                       available
                  There is no dependence                                   Good quality water
                  on a single entity                                       available for irrigation
                  Quality of ‘rural’ life for                              Potential to link with
                  recruitment of executives                                other industries in
                                                                           region, e.g. horticulture
                  Dairy products identified                                Organic product
                  as a functional food                                     potential
                  Good and expanding                                       Potential to link with
                  transport networks                                       other milk sources
                                                                           for specialty products,
                                                                           e.g. goat, sheep
                  Cooperative support at                                   Improved quality and
                  local government level                                   competitiveness of
                                                                           traditional production
                                                                           systems
                                                                           New cluster and supply
                                                                           chain opportunities


                                                                    Value Added Dairy Manufacture in the Latrobe Valley: 18
                      Section 2:
                      Latrobe

                   Competitive advantages
                   Transport
                   An enduring legacy of the (heavy) industry already established in Latrobe City is the excellent transport
                   routes now established.
                   The Princes Freeway is double lane, dual carriage highway from Melbourne right through to Traralgon
                   at the eastern end section of Latrobe.
                   With the opening in 2003 of the Hallam By-Pass, travel time from the heart of Melbourne to Latrobe
                   is as little as one hour and 15 minutes. From the major manufacturing centre of Dandenong and the
                   rapidly developing south eastern corridor, it is even less.
                   It is also important to understand that the current road system can readily carry very large tonnages
                   as the road pavement and bridges have been constructed and are used to transport extremely large
                   loads required for power generation and other large developments. That means transport for almost
                   any business is not a problem.
                   Rail transport is also very well established, again to support the transport of produce from Latrobe
                   to Melbourne and the world.
                   Large tonnages from Latrobe can be easily railed direct to the Ports of Melbourne and Geelong,
                   for export and distribution around Australia.
                   Further expansion of this rail system is being explored with, for example, the possibility of developing
                   rail transport around the designated Heavy Industry Park near Morwell and the development of a large
                   intermodal centre at Morwell.


The Latrobe City Council has recently acquired around 64 hectares of land between the Princes Freeway and the
Gippsland Intermodal Freight Terminal (GIFT) site east of Morwell close to the HIP. The close proximity of this intermodal
facility and its potential to support a range of transport related industries provide significant benefits to the HIP.
Source: Sinclair Knight Merz Pty Ltd, Heavy Industrial Park Development Study for Latrobe City, June 2003. P. 2

This study has not restricted its scope to solely heavy industries, given that there is a range of other moderate to
light industries that would also be well suited to this site and offer worthwhile benefits to the local community.
Source: Sinclair Knight Merz Pty Ltd, Heavy Industrial Park Development Study for Latrobe City, June 2003. P. 3



                   Support Services
                   Latrobe City provides general support and ancillary services that often simply don’t exist in other
                   regional centres.
                   The reason for the growth of such services is the historic development patterns demanded by location
                   and rapid growth, especially associated with the power industry.
                   The Latrobe Valley, during its electricity development boom through the 1950s, 1960s and 1970s
                   in particular, was relatively isolated from the manufacturing centres of Melbourne and was forced
                   to develop its own service and support industries.
                   The old Princes Highway simply could not sustain rapid turnaround for maintenance and supply of
                   materials required, nor was the specialised knowledge required for power generation necessarily
                   available in Melbourne.
                   Since those days however, the transport systems have improved dramatically, again because of the
                   requirements of the local power and other industries. Roads and bridges have been designed to take
                   an almost unlimited tonnage, which means transport of large component parts to and from Latrobe
                   is much simpler than in most other regional centres.
                   The rail system is also of heavy standard and is capable of absorbing substantial quantities of freight
                   business.
                   All that means Latrobe is uniquely placed. The strong service and support industries developed as
                   necessity still exist, while at the same time the relative isolation of last century is but a memory.


                                                                                                         Section 2: Latrobe: 1
Because of the rapid growth of Melbourne, particularly in the south-eastern corridor, Latrobe is closer
to the geographic centre of Melbourne than other regional centres. It is also much closer to the major
manufacturing centre around Dandenong, although clearly much less expensive. This opens up real
opportunities to develop in Latrobe and service much of the metropolitan area.
The following table shows some of the ancillary services that are available in Latrobe. We invite you to
tick those services that you would require to assist in the development of your company. This will enable
you to make an assessment about what is available in Latrobe. We also welcome your thoughts of any
gaps that exist and how they might be filled.


Latrobe Region Supporting Industries
❐   Aero Engine Refurbishment                            ❐    Hydro Engineering and installation
❐   Agricultural Equipment and Consulting                ❐    Industrial Maintenance and Overhaul Services
❐   Aircraft Construction and Refurbishment              ❐    Industrial Painting and Blasting
❐   Aquaculture Equipment and Consulting                 ❐    Instrumentation Design and Manufacture
❐   Architectural Design                                 ❐    Insulation and Cladding
❐   Architectural Plaster, Concrete and Fibreglass       ❐    IT Management and Service
❐   Asphalting and Paving Services                       ❐    IT Software Design and Consulting
❐   Beverage Manufacture and Packaging                   ❐    Joinery and Building Services
❐   Biotech Services and Research                        ❐    Light and Heavy Machining
❐   Chemical Manufacture                                 ❐    Local, Interstate and Heavy Transport Services
❐   Civil Construction and Earthworks                    ❐    Marketing and Public Relations
❐   Civil Engineering and Design                         ❐    Materials Handling Equipment Manufacture
❐   Civil Planning and Surveying                         ❐    Metallurgy Services
❐   Commercial and Industrial Construction               ❐    Multi-media Services
❐   Commercial and Industrial Security                   ❐    Oil, Gas and Petrochemical Services
❐   Commercial and Industrial Signage                    ❐    Onsite Machining and Pipeline Services
❐   Communications and CCTV Installation                 ❐    Plastic Rotor-Moulding
❐   Dairy Processing and Manufacture                     ❐    Plating and Surface Finishing
❐   Directional Drilling Services                        ❐    Powder Coating
❐   Electrical Wiring and Installation                   ❐    Precision and CNC Machining
❐   Electrical Component Overhaul                        ❐    Precast Concrete Panel Manufacture
❐   Electronics Design and Manufacture                   ❐    Printing and Binding Services
❐   Engineering Design                                   ❐    Project Planning and Management
❐   Environmental and Commercial Diving                  ❐    Pump Re-Engineering and Refurbishment
❐   Environmental Engineering                            ❐    Power System Design and Construction
❐   Environmental Rehabilitation and Recycling           ❐    Quarry and Stone Supplies
❐   Environmental Services and Consulting                ❐    Rigging and Scaffolding
❐   Exhibits and Interactive Display Construction        ❐    Rigging and Lifting Equipment Manufacture
❐   Fire Protection Design and Installation              ❐    Sheet Metal Fabrication
❐   Food Processing and Packaging                        ❐    Structural Fabrication
❐   Furniture Design and Manufacture                     ❐    Textile Processing and Manufacture
❐   Geo-Technical Services                               ❐    Thermoformed Acrylic Bench-top Manufacture
❐   Heavy Cranage                                        ❐    Timber Drying and Processing
❐   Heavy Engineering Services                           ❐    Welding and Specialist Services

For further information about these businesses, contact Invest Latrobe +61 3 5128 5717 or the Gippsland
Regional Office of the Industry Capability Network (Victoria) Limited, formerly the Industrial Supplies Office
telephone 5176 1901.


                                                                                        Section 2: Latrobe: 2
Fast Rail Project
The development of the Regional Fast Rail project will be of great benefit to Latrobe.
The project promises to deliver at least six extra peak services each weekday on the Latrobe
line and the fastest service available will cut some 20 minutes from the trip to Melbourne.
The new trains will provide a mix of express services, semi-express services stopping at key centres,
and services stopping at all existing stations to extend the benefits of the project. Existing trains will
supplement the services provided by the new trains. Services will commence in late 2005.

Weather Information
The following table sets out the ‘mean daily’ weather information as recorded by the Bureau
of Meteorology (Yallourn Station):

                      Jan    Feb     Mar      Apr       May      Jun         Jul      Aug     Sep       Oct      Nov    Dec

    Max Temp          24.7   25.0    22.5     18.8      14.9     12.5       11.8      13.2    15.0      17.7     19.9   22.2
     Min Temp         12.7   13.3    12.1         9.7   7.4          5.6    4.6       5.4     6.6          8.3    9.8   11.4
Sunshine (hrs)        8.4     7.9    6.4          5.5   4.1          3.3    3.8       4.7     5.5          6.4    7.0    7.6
 Rainfall (mm)        51.0   49.3    60.0     65.5      87.6     78.5       83.1      90.4   88.9       84.9     81.3   70.8




Overcast Days
The following table sets out the mean number of overcast days in the Latrobe Valley, compared with
five other areas in Victoria.


             Location                 Jan-Mar            Apr-Jun               Jul-Sep         Oct-Dec           Annual Total

         Latrobe Valley                    37.2               49.3                 50.0           46.7              183.3

             Wangaratta                    15.7               29.7                 35.3             22.3            102.9
                 Swan Hill                 16.9               31.9                 33.1             26.2            108.1
                   Echuca                  18.8               35.2                 37.5             27.2            118.6
                 Warragul                  32.5               45.3                 49.9             44.4            172.0
          Warrnambool                      35.6               51.7                 53.4             46.0            186.7

                                                                           Source: Bureau of Meteorology Climate Averages, 2001




                                                                                                     Section 2: Latrobe: 3
                       Rainfall/water availability
                       Latrobe City, like much of west and south Gippsland, is blessed with a relatively stable water supply,
                       thanks to the consistent rainfall patterns across the region.
                       A century of records show that rainfall is fairly evenly spread across all seasons, with a low of between
                       40 and 50 mm during February and a high of 80 and 90 mm in October.
                       The annual mean of nearly 800 mm (32 inches) per annum at Morwell, 977 mm (39 inches) at Moe,
                       and 814 mm (32.5 inches) at Traralgon means that a consistent supply of high quality water is available
                       for industry and residential development alike.


                                                                      Mean             Highest monthly Lowest monthly                  Mean number
                                           Month                  rainfall (mm)          rainfall (mm)   rainfall (mm)                   rain days

Rainfall Statistics:                      January                       59.4                   172.5                    1.0                    8.4
Moe (Gippsland                          February                        54.5                   214.5                    1.8                    6.8
Water Board)                               March                        65.9                  223.5                     1.8                    9.4
1987 to 1997
                                             April                      75.0                  249.1                     0.0                    11.5
using all
                                              May                       89.8                  229.5                     6.5                   14.0
available data
                                             June                       93.5                   310.0                   16.2                   15.9
                                               July                     90.6                   194.1                   16.4                   16.2
                                          August                        96.4                   196.5                   21.8                   16.9
                                     September                          97.1                   227.6                   30.4                   15.1
                                         October                        98.6                  208.6                     5.7                   14.0
                                      November                          82.8                   193.2                   20.2                   12.2
                                      December                          73.7                   181.0                    0.0                    9.9
                                             Total                     977.2                    na                      na                   150.3
                            Source: Bureau of Meteorology (Latrobe City Statistical Profile May 2003, prepared by Gippsland Research and Information Service)




                                                                      Mean             Highest monthly Lowest monthly                  Mean number
                                           Month                  rainfall (mm)          rainfall (mm)   rainfall (mm)                   rain days

Rainfall Statistics:                      January                       52.3                   151.0                    0.0                    6.5
Morwell                                 February                        43.6                   188.9                    0.0                    5.5
(Morwell                                   March                        57.5                  204.2                     1.8                    7.3
Mail Centre)
                                             April                      63.3                   216.1                    5.1                   10.1
1987 to 1997
                                              May                       66.6                   197.8                    5.6                    11.4
using all
available data                               June                       73.7                   270.8                   15.3                   13.2
                                               July                     67.6                   158.9                   14.0                   13.5
                                          August                        76.5                   178.1                   13.0                   14.1
                                     September                          79.6                   192.0                   26.0                   13.1
                                         October                        79.3                   174.2                    2.8                    11.7
                                      November                          71.5                   167.0                   15.3                    9.9
                                      December                          65.4                   196.1                    3.3                    8.3
                                             Total                      797                     na                      na                   124.6
                            Source: Bureau of Meteorology (Latrobe City Statistical Profile May 2003, prepared by Gippsland Research and Information Service)




                                                                                                                               Section 2: Latrobe: 4
                                                                      Mean             Highest monthly Lowest monthly                  Mean number
                                           Month                  rainfall (mm)          rainfall (mm)   rainfall (mm)                   rain days

Rainfall Statistics:                      January                       56.4                  200.0                     0.0                    9.1
Latrobe Valley                          February                        41.3                   141.8                    7.0                    8.6
Airport                                    March                        52.7                   125.0                    8.8                    11.4
1984 to 1997
                                             April                      59.1                   114.8                   10.2                   13.0
using all
                                              May                       57.7                   138.0                   19.0                   13.5
available data
                                             June                       69.6                   151.2                   40.4                   16.7
                                               July                     76.1                   104.0                   24.8                   18.0
                                          August                        67.8                   115.2                   34.4                   19.0
                                     September                          87.1                   162.8                   50.0                    17.3
                                         October                        81.6                   175.2                   39.6                   15.5
                                      November                          81.8                   135.8                   26.8                   14.3
                                      December                          83.1                  203.2                    30.2                   14.2
                                             Total                     814.5                    na                      na                   170.6
                            Source: Bureau of Meteorology (Latrobe City Statistical Profile May 2003, prepared by Gippsland Research and Information Service)


                       The water is of such naturally high quality that much of it is suitable for use by industry as raw,
                       that is untreated, water. For industry, this is a real benefit as the raw water is provided at very low cost,
                       often around half that of treated water. Treated water is also readily available for those industries that
                       require it and for domestic use, again at relatively low cost.
                       The following chart shows water charges compared to metropolitan water suppliers.

                                                                                  Business                    Raw                    Sewerage
                                                          Residential            Commercial               water price                  price
                              Water Authority             water price            water price            (if applicable)             (wastewater)

                              Gippsland Water            Treated Water           Treated water           Raw Water                   Wastewater
                                                         65.6 cents/kl           65.6 cents/kl         20-35 cents/kl               $1.04 cents/kl
                                                                                                                                   (prices may vary
                                                                                                                                     with volume)
                               City West Water          Treated water           Treated water                                         Residential
                                                        79.82 cents/kl          77.57 cents/kl                                      91.09 cents/kl
                            Yarra Valley Water           Treated water           Water usage                                        Residential
                                                         77.57 cents/kl         75.31 cents/kl                                    90.02 cents/kl
                                                                                                                                Commercial disposal
                                                                                                                                  87.76 cents/kl
                       Coliban Water Bendigo            Treated water           Treated water                                        Residential
                                                        54.50 cents/kl          54.50 cents/kl                                     57.53 cents/kl
                                                                                                                                   Non-Residential
                                                                                                                                   39.04 cents/kl
                       Coliban Water Kyneton            Treated water           Treated Water                                        Residential
                                                        54.50 cents/kl          54.50 cents/kl                                     $1.39 cents/kl
                                                                                                                                   Non-Residential
                                                                                                                                   39.04 cents/kl
                                 Barwon Water            Treated water           Treated water                                     Residential and
                                                         72.8 cents/kl           72.8 cents/kl                                     non-residential
                                                                                                                                    89.0 cents/kl
                             South East Water           Treated water                                                              Residential and
                                                        78.67 cents/kl                                                             non-residential
                                                                                                                                   85.48 cents/kl

                                                                                                  Source: Web sites for each Water Authority as at July 2003




                                                                                                                               Section 2: Latrobe: 5
                As well as the unique option of high quality, piped bulk raw water at low cost, and low cost treated
                water supplies and waste servicing, Gippsland Water also offers the following in Latrobe:
                q Very secure water supply systems with existing spare capacity

                q Environmentally sustainable waste treatment systems and ocean outfalls suitable for tropically saline

                  wastewaters produced by major industry
                q Considerable existing spare waste acceptance, treatment and disposal capacity

                q A fully licensed regional prescribed waste facility

                q Highly experienced corporate and engineering services for all forms of industry.

                The level of secure water supplies and environmentally sustainable treated waste effluent disposal
                systems is the highest of any region in Victoria and, in the case of Latrobe, spare capacity in both
                is currently available.
                The ability, unique in Australia, to supply low cost, high quality raw water and receive saline wastes
                provides a competitive advantage to industry.
                Latrobe has an existing system of large diameter pipelines capable of supplying high industrial demands
                of good quality raw water, another feature unique to this area.

                Water Supply
                Water is supplied to Latrobe from three reliable and high quality sources:
                q Moondarra Reservoir q Narracan Creek q Blue Rock Dam

                These sources supply the whole of Latrobe and as a result of excellent infrastructure are interlinked
                thereby ensuring supplies are supplemented. Moondarra Reservoir produces such high quality raw water
                that it is suitable for some industrial uses without treatment. Currently around 66% of water supplied by
                Moondarra Reservoir is delivered to industrial customers untreated.

                                                       Unit             29 January        11 February         25 February
                              Description             measure             2002               2002                2002

Water                                Aluminum           mg/l               0.24
Quality Data:            Ammonia as Nitrogen            mg/l               0.012                                  0.010
Moondarra                               Arsenic         mg/l             <0.0005
Water Quality
                                       Bromide          mg/L               <0.20
                                     Cadmium            mg/l             <0.0002
                                  Chlorophyll a         µg/l                7.2                5.7                 6.4
                Colour 465nm @ pH Ambient               Pt Co               30                 30                  30
                                        Copper          mg/l               0.004
                        Dissolved Oxygen (Lab)          mg/l                8.3                8.3                 8.4
                                          E coli     orgs/100ml              4                  1                   0
                                            Iron        mg/l                0.2                                    0.2
                                  Iron - Soluble        mg/l                0.2                                    0.1
                                            Lead        mg/l              <0.001
                                   Manganese            mg/l               0.010                                  0.007
                           Manganese Soluble            mg/l               0.002                                  0.001
                                       Mercury          mg/l             <0.0002
                            Nitrate as Nitrogen         mg/l              <0.005                                  0.006
                             Nitrite as Nitrogen        mg/l              <0.005
                              Organic Nitrogen          mg/l                0.4                                    0.2
                                       pH (Lab)         Units               6.9                7.0                 7.0
                                   Temperature     Degrees Celcius          18.3               17.6                17.9
                                 Total Nitrogen         mg/l               0.42
                               Total Phosphate          mg/l               0.02                                   <0.02
                                 Turbidity (Lab)         NTU                1.6                2.6                 2.1
                                            Zinc        mg/l               0.02



                                                                                                      Section 2: Latrobe: 6
Industry Supplied
Gippsland Water has the experience, technology and systems required to deal with a wide variation
of water and wastewater requirements, demonstrated by the current industries serviced. These include:
q Australian Paper, Maryvale Mill (the nation’s largest supplier of pulp and paper products)

q National Foods (manufacturing dairy products)

q Power generators - Loy Yang Power, Edison Mission Energy, Hazelwood Power, Yallourn Energy

q Bonlac and Murray Goulburn (Dairy processing) q Hospitals q Industrial Laundries

q Rosedale Leather (leather processing plant employing 120 people and processing

  some 7,000 hides a week).

Supply and Demand
Current average annual demand on the Moondarra Reservoir is approximately 54 Gigalitres,
leaving around 10 Gigalitres per annum of spare yield for future development within Latrobe.
Gippsland Water also has a Bulk Water Entitlement from Blue Rock Dam of 15.15 Gigalitres.
The Victorian Government has a further 41 Gigalitres share in Blue Rock Dam that is currently
unallocated and has the potential to become available for use by industry.

                                                                              Unit
                                     Description            Result           measure

 Water                  Absorbance Ratio @ 254nm             0.026          Abs Units
 Quality Data:                               Alkalinity        14          mg/L CaCO3
 Morwell Treated                            Aluminum          0.05            mg/l
 Water Quality                                  Arsenic    <0.0005            mg/l
                                            Cadmium        <0.0002            mg/l
                                               Calcium          4             mg/l
                                              Chloride         14             mg/l
                                           Chromium         <0.001            mg/l
                       Colour 465nm @ pH Ambient               <5             Pt Co
                                                Copper      <0.020            mg/l
                                         E.coli Colilert        0          orgs/100ml
                                               Fluoride       <0.1            mg/l
                                        Free Chlorine         0.24            mg/l
                                                    Iron      <0.1            mg/l
                                      Langelier Index        -2.56
                                                   Lead     <0.001            mg/l
                                          Magnesium            1.6            mg/l
                                          Manganese         <0.001            mg/l
                                              Mercury      <0.0002            mg/l
                                                 Nickel     <0.001            mg/l
                                                 Nitrate      0.34            mg/l
                                             pH (Field)        7.2             Units
                                              pH (Lab)         7.3             Units
                                    Plate Count 37’C            0            orgs/ml
                                             Selenium      <0.0002            mg/l
                                                  Silica        7             mg/l
                                               Sodium          13             mg/l
                                              Sulphate         11             mg/l
                                         Temperature          17.7        Degrees Celcius
                                Total Chlorine (Field)        0.35            mg/l
                              Total Coliforms Colilert          0          orgs/100ml
                               Total Dissolved Solids          57             mg/l
                                        Turbidity (Lab)        0.1             NTU
                                                    Zinc     <0.01            mg/l



                                                                                   Section 2: Latrobe: 7
                  Waste Disposal
                  Saline Waste Outfall Pipeline (Maximum Capacity 35MI/day).
                  The saline waste outfall pipeline currently has about 10MI/day spare capacity.

                  Prescribed Wastes
                  Gippsland Water has the ability to deal with a wide range of waste through its prescribed waste facility
                  at Dutson Downs, which is 250 hectares in area with a buffer of approximately 8000 hectares.
                  In the 17 years of operation less than 10 hectares of the site has been utilised in processing 70%
                  of all prescribed waste from Gippsland industry.

                                                          2002/03          The site is currently licensed by the EPA
                             Prescribed wastes              total          to accept the following wastes:
                                                                           (a) oil contaminated stones and gravel
Waste capacity     Milk and food processing waste        6,052,410    Kg
                                                                           (b) soil contaminated by oil and oil products
at Dutson Downs                          Grease Traps    2,142,960    Kg
                                                                           (c) glycol contaminated soil
                               Industrial Washwaters     1,006,680    Kg
                                                                           (d) tannery waste containing chromium
                       Triple Interceptor Trap waste       964,910    Kg
                                                                           (e) grit and screenings from grit chambers
                                        Oil and Water    4,640,710    Kg
                                                                                under the control of the licensee
                                  Contaminated Soils       455,970    Kg
                                                                           (f) grease trap waste
                                     Asbestos Waste         627,190   Kg
                                                                           (g) milk processing waste
                                     Dairy Filter cake     962,740    Kg
                                                                           (h) food processing waste
                                          Saline water      213,160   Kg
                                                                           (i) tannery waste not containing chromium
                                        NORM waste         331,800    Kg
                                                                           (j) oil water mixes
                                 TANNERY WASTES                            The chart at left provides an indication
                                Chromium Shavings         1,194,180 Kg     of the quantity and type of waste that is
                                 Chromium Sludge         3,273,650 Kg      currently being handled by the system.
                                Hair and Trimmings         390,020 Kg
                                  NON-PRESCRIBED
                                  and G.W. WASTES
                     Septic Tanks/Non-prescribed
                                            wastes       1,693,380    Kg
                           Gippsland Water wastes           981,040   Kg
                        Gippsland Water: Asbestos               900   Kg
                       Biosolids: Warragul W.W.T.P.       1,133,360   Kg
                                          Biosolids:
                          Wilsons Prom, Tidal River        60,660     Kg
                    Trial biosolids from Paynesville        8,400     Kg
                    Others: Solids: Lime and Water         11,620     Kg
                  Other liquids: Storm water waste         14,740     Kg



                  How is the Environment Protected?
                  Ongoing monitoring of wastewater quality and the environment surrounding the outfall, coupled with
                  ongoing surveillance by the Coastal Advisory Committee and the EPA, provides assurance that the outfall
                  is operating as intended and without detriment to the environment.
                  Gippsland Water is proactive in its monitoring of the entire wastewater system and has worked with
                  the EPA to develop a monitoring regime for the ongoing operation of the outfall. Appropriate procedures,
                  parameter limits and frequency of reporting are all documented in the current EPA Waste Discharge
                  Licence No. LX42.
                  Monitoring is carried out along the transport system (the ROS), the treatment system (Dutson Downs),
                  the outfall (Delray Beach Ocean Outfall), and in the receiving waters. Although parameters and limits
                  have been set there is an ongoing review aimed at ensuring that the program is relevant and effective.
                  An annual report is prepared and is submitted to the EPA to demonstrate compliance with the monitoring
                  objectives and to enable the on-going improvement of the program and future wastewater management
                  strategies.


                                                                                                         Section 2: Latrobe: 8
              Housing
              One of the key features of the Latrobe region is the diversity of property styles, sizes and locations
              available. Latrobe, thanks to its linear development, can provide urban style residential areas, semi rural
              and rural areas and country town lifestyle options, all within 20 minutes or less of the major centres.
              Housing in Latrobe is also very affordable, making it an attractive option for employees of businesses
              moving to the area. Housing styles range from small, inexpensive rental or investment options to large
              executive homes in scenic locations.
              Rental or purchase options are also more accessible than in other areas of the state and the
              metropolitan areas. More than 92 percent* of rental properties - many of them solid homes
              in good locations - are available at under $200 a week. This compares to only 70 percent*
              of properties being available under $200 per week in other areas of the State.
              Essentially, while the quality of properties is on par with other areas across the state, the rental price tag
              is not. This trend is also reflected in housing prices and therefore monthly mortgage payments. Just under
              52 percent* of Latrobe home buyers pay monthly mortgages of under $600, while across Victoria only
              23.6 percent* pay less than $600 a month.
              There are plenty of homes available in the $600 to $1,000 per month mortgage range
              (42.6 percent* in Latrobe) but across the rest of Victoria, most people (70.2 percent) are required
              to pay more than $600 a month and more than a third (36 percent) pay more than $1000 a month.
              Again, the relatively low price of housing makes Latrobe an excellent place to reside.
              Latrobe is also beginning to see the flow on effects of growth in the south eastern metropolitan area,
              which makes it doubly attractive as an investment and development proposition.
              At the moment, the price of land and services is very reasonable compared to the outer suburbs of
              Melbourne, while the growth apparent over the next few years means an excellent return on investment.
                                                         *Source: Australian Bureau of Statistics, 2001 Census (Latrobe City Statistical Profile May 2003,
                                                                                              prepared by Gippsland Research and Information Service)
                            NOTE: While prices and rentals are likely to have increased since 2001 with the property boom, relative costs are generally
                                                                                   still less than the metropolitan area and many other regional centres.



                   Locality                 0-99             100-199            200-299              300+            Not stated              Total

Dwelling:        Latrobe       No.         2698                2462                 85                 86                 246                5577
Weekly rent                     %          48.4                44.2                 1.5                1.5                4.4                100.0
              Gippsland        No.         6945                8680                341                280                 779               17025
                                %          40.8                 51.0               2.0                1.6                 4.6               100.0
                 Victoria      No.         72046             198659              63766               32785               15725             382981
                                %           18.8               51.9               16.7                8.5                 4.1               100.0

                                                          Source: Australian Bureau of Statistics, 2001 Census (Latrobe City Statistical Profile May 2003,
                                                                                              prepared by Gippsland Research and Information Service)
                                                                                                               NOTE: includes caravans in caravan parks



                   Locality              0-199       200-399 400-599 600-799 800-999                            1000+ Not stated                Total

Dwelling:        Latrobe       No.        379           1508           2120          1450           806          1047           433            7743
Monthly                         %         4.9           19.5           27.4          18.7           10.4         13.5           5.6            100.0
mortgage      Gippsland        No.        940           3532           6112         4642           2751          4006           1537          23520
payments                        %         4.0           15.0           26.0         19.7           11.7           17.0           6.5          100.0
                 Victoria      No.       13186         32005         68427          85791         78960        173069          29362         480800
                                %         2.7           6.7           14.2           17.8          16.4         36.0            6.1           100.0

                                                          Source: Australian Bureau of Statistics, 2001 Census (Latrobe City Statistical Profile May 2003,
                                                                                              prepared by Gippsland Research and Information Service)
                                                                                                               NOTE: includes caravans in caravan parks



                                                                                                                           Section 2: Latrobe: 9
                   Population
                   Latrobe City is the population centre of the diverse and dynamic Gippsland region.
                   The population of Latrobe is now estimated at 70,000 but when the neighbouring shires of Baw Baw,
                   South Gippsland and Wellington are taken into consideration the population swells to nearly 169,000.
                   The population explosion in the south eastern corridor of Melbourne means that within an hour’s drive
                   of Latrobe the population is more than 200,000 - and growing rapidly.
                   At the moment, the price of land and services is very reasonable compared to capital cities,
                   while the growth apparent over the next few years means an excellent return on investment.
                   Latrobe City is in the fortunate position of having a higher than average youth population (0-19)
                   and a lower than average older population (60+). (2001 census)
                   In fact, Latrobe goes against the general trend, with the percentage of population in the 0-4, 5-9,
                   10-14, and 15-19 year age groups higher than the Gippsland and State average.
                   The percentage of population in the 20-24 and 25-39 age groups is higher than the Gippsland average
                   and just under the State average, while the percentage of population in the 40-59 age group is very
                   close to the State average.
                   The spread of population indicates a youthful and growing community.
                   The following graph shows the breakdown of population.




                                        0-4      5-9       10-14       15-19      20-24       25-39       40-59        60+         O/s
                        Locality       years    years      years       years      years       years       years       years      visitors      Total

Age distribution             Latrobe   4617     5444        5402        5248       4040        13482       17787      10798         204       67022
(2001 Census)        % of population    6.9      8.1         8.1         7.8        6.0         20.1        26.5       16.1         0.3       100.0
                           Gippsland   14567    17457      18504       16483       11043       41902      62731       44859         854      228400
                     % of population    6.4       7.6       8.1          7.2         4.8        18.3       27.5        19.6         0.4       100.0
                             Victoria 299615 321899 322199 321749                 311394 1045824 1214081 775336 32853 4644950
                     % of population    6.5    6.9    6.9    6.9                    6.7    22.5    26.1    16.7  0.7   100.0


                                                        Source: Australian Bureau of Statistics, 2001 Census (Latrobe City Statistical Profile May 2003,
                                                                                            prepared by Gippsland Research and Information Service)
                                                                                        NOTE: The estimated population in 2004 was around 70,000




                                                                                                                       Section 2: Latrobe: 10
Education
Latrobe is the home of a range of educational institutions that are highly rated on the State
and National scale.
Monash University’s Gippsland campus was among the highest ranked regional universities in the 2003
Good Universities Guide, while the local Institute of TAFE, GippsTAFE, provides extensive opportunities in
Vocation and Educational Training (VET) industry training and upskilling, and apprenticeships.
Latrobe is also the home of Gippsland Group Training, one of the largest group training organisations
in the nation, which employs, trains and places with host employers more than 850 apprentices
and trainees.
An exciting new development in local education is the establishment of the Gippsland Education Precinct
at Churchill that will bring together Monash University, GippsTAFE, local secondary school Kurnai College
(Year 11 and 12 students) and Gippsland Group Training (GGT).
This is a further demonstration of how local educational institutions work together to deliver the best
educational outcomes for the region and employers.
Latrobe is also well served through a comprehensive school network.
As well as a selection of public secondary colleges and a large Catholic Regional College, there are
two well-established private schools in the region, St Paul’s Anglican Grammar at Warragul and
Gippsland Grammar in Sale, each less than half an hour from Latrobe.
St Paul’s Anglican Grammar has expressed its confidence in the future of Latrobe by establishing
a private junior school at Traralgon.
The following is an overview of each of the major post-secondary educational institutions.

Monash University Gippsland
Monash’s Gippsland campus was among the highest ranked of Australia’s regional universities,
in a recent edition of the annual Good Universities Guide.
It received a five-star rating for positive graduate outcomes including graduate starting salaries
and success in entering the workforce or going on to further education.
The Gippsland campus is part of Australia’s largest university that, along with the University of Melbourne,
was the highest rated University in Victoria.
Monash University Gippsland Campus is located in a unique rural setting at Churchill. Its features include
diversified course offerings (eight of 10 Monash faculties on offer), connection to the community, high
quality teaching that was continually given five star rating by the Good Universities Guide, excellent
support network, fantastic natural environment and a prestigious Monash degree.

GippsTAFE (Central Gippsland Institute of TAFE)
GippsTAFE serves more than 10,000 students across the Gippsland area through four campuses.
The major two, at Morwell and Newborough, are located in Latrobe.
GippsTAFE provides a wide range of vocational and industry training, with an emphasis on developing
courses in close association with industry.
Its student range is broad - from young people who have just left secondary school, to mature age
students seeking to update existing skills for promotion or advancement. As well, GippsTAFE provides
specific industry training tailored to the needs of an organisation or industry sector.
Most certificate and diploma courses are nationally accredited, with an emphasis on quality training and
recognised outcomes.
Information about the range of courses available is provided through GippsTAFE’s website,
www.gippstafe.vic.edu.au




                                                                                     Section 2: Latrobe: 11
Gippsland Group Training
Gippsland Group Training (GGT) operates in four regions across Gippsland as well as in Melbourne
and employs in excess of 900 Apprentices and Trainees in a diverse range of vocations.
The company operates by employing apprentices and trainees, providing relevant training, and placing
them with employers. The system benefits employers and employees alike, through a simple hire system.
GGT employs the young people and charges host employers an hourly rate inclusive of wages, annual
leave and loading, sick leave, public holidays, schooling, work cover, payroll tax, tools, protective clothing
and superannuation.
Employers are invoiced weekly or monthly at the applicable hourly rate for hours actually worked.
There are no other charges.
The system provides business and industry with the opportunity to employ apprentices and trainees
at competitive rates while removing the red tape associated with recruitment, employment and training.
There is a high degree of flexibility in the system. Should a host employer experience a downturn
in activity or reach the end of a particular contract, they can return the young people to GGT who
will relocate the apprentice or trainee with another host employer.
In this manner, GGT can meet the changing needs of employers while the young apprentices and
trainees benefit from systematic rotation through businesses and obtain a broad range of experience
within their specific trade.
GGT instructors in training centres deliver nationally accredited training and provide high-quality,
industry-specific induction training.
Apprenticeships are offered in all the traditional trade areas.

Gippsland Education Precinct
The Gippsland Education Precinct (GEP) is a new development that will promote educational
opportunities for the local community.
Located on the Gippsland campus of Monash University, the $14 million education development
centre will bring together Monash University, GippsTAFE, Kurnai College (Year 11 and 12 students)
and Gippsland Group Training (GGT).
When fully operational, the Precinct will have the capacity to educate 750 secondary students.
It will provide a single facility linking year 11 and 12 students with GGT, GippsTAFE and Monash.
This centralised facility will minimise barriers when transferring between courses and allow Year 11
and 12 students to customise their education to best meet needs, interests and abilities.
For instance, the facility will provide:
q an extensive range of articulation pathways between the different sectors - secondary school,

   TAFE, Group Training and University.
q Direct entry into Monash Gippsland undergraduate courses for students who study at the facility

   and meet the appropriate pre-requisites.
q Access to a challenging accelerated learning program for high-achievers.

q A natural bridging program for international students who are looking for safety, English language

   skills and innovative pathways to continue their education in Australia.
The GEP will also better support all students through support systems such as career planning
assistance as a result of the innovative pathways between secondary school, TAFE, GGT and University,
and a strategic on-line environment offered by the ICT Hub.




                                                                                      Section 2: Latrobe: 12
Power availability
The Latrobe Valley has an advantage that no other area of the state can provide - ready availability of
power, with opportunities to co-locate and in some instances direct connect with large power generators.
Three of the Latrobe Valley generation sites - Yallourn Energy, International Power Hazelwood and
Loy Yang Power - can provide access to competitively priced electricity, support infrastructure and
associated services and industrial zoned land.
Major business advantages can be gained for potential industrial customers where competitively priced
power, land, coal, heat, steam, water or waste water management are primary plant requirements.
For large businesses there is also the opportunity to “Direct Connect”, which refers to the direct supply
of electrical power from the generation source, thereby eliminating the requirement to use the
Transmission and Distribution systems.
The Latrobe Valley power generation sites are generally well serviced by key infrastructure such
as heavy haulage road access, water (raw and treated), drainage, sewerage, ash management,
Saline Waste, and natural gas supplies established on-site.
There is also a range of sites from which to choose, although it should be noted that some of these
sites are under consideration for development and availability is subject to change.
Two potential industrial sites have been identified at the Yallourn Site, totalling 50 hectares,
while six potential industrial sites have been identified at the Hazelwood Site, totalling 182 hectares.
At Loy Yang Power, 17 potential industrial sites have been identified, with the total area 210 hectares.
At Yallourn, the generator closest to Melbourne, each site is some 25 hectares in size,
while at Hazelwood land blocks range up to 50 hectares on size.
Of the 17 nominated industrial sites at Loy Yang, four are larger than 10 hectares, with the largest
single site 80 hectares. The sites currently identified range from partially serviced semi-rural to fully
serviced industrial.
Other local generators, including Edison Mission Energy and Jeeralang Power Station, also offer
development opportunities in conjunction with their businesses.

Clean coal
When talking about brown coal fired power stations it is important to realise that Latrobe Valley coal
is clean, low in ash and sulphur and can be readily mined at low cost per unit of energy.
Brown Coal is also free of methane in the ground and none is produced in the combustion process.
This is important as methane has 21 times the greenhouse impact of CO2.
The extraordinary amount of coal readily available in the Latrobe Valley is a major resource for
the whole of the state and offers numerous development opportunities.
The Latrobe Valley reserve contains more than 160 billion tonnes of accessible coal - enough to last
more than 1000 years at present rates of production.
Because these huge seams of coal lie only 15 metres below the surface, they can be efficiently mined
and effectively rehabilitated.
The amount and accessibility of coal means it will continue to be a dominant power source for the
forseeable future, and new techniques are being introduced all the time that allow the coal to be
burned more efficiently, and with less pollution.
The coal is suitable for power generation, gasification, liquefaction, drying, briquetting, and agriculture.
Brown coal is also a useful feedstock for carbon product manufacturing. The coal can easily be blended
with other fuels including waste products to minimise landfill dumping and reduce green house gas
emissions.
Further information about the opportunities for direct connect power can be obtained from
power generation companies or by contacting Invest Latrobe.




                                                                                        Section 2: Latrobe: 13
IT Infrastructure
While there are some regional areas that may have problems with telecommunications infrastructure,
Latrobe is not one of them.
Because of its relatively close proximity to Melbourne and the number of major industries in the area,
IT infrastructure is well established throughout all the major towns and centres.
This high capacity has enabled the development of a number of telecommunications-dependant
industries, such as the Australian Securities and Investment Commission’s National Information
Processing Centre at Traralgon.
As well, as an associated part of the State Government’s fast rail project, a new fibre optic network
will be installed to Latrobe.
The network will upgrade signal and rail communications for fast, reliable and safe rail operations
along the four corridors.
The network’s surplus capacity will also be marketed to deliver improved and lower cost internet
services to the Latrobe region.
It will provide ample capacity for commercial use now and will cater for future growth. The capacity
of a single fibre is in the order of 100 Terabytes/sec, that is 1,000,000 Megabytes. World data traffic
at any one time is estimated at 8 Terabytes, a small portion of the single fibre capacity.
Telstra Countrywide provides a complete range of services to numerous customers in major centres
in Latrobe.
The services include Wideband IP, ADSL, ISDN and satellite data networks and Telstra provides
all these services to existing customers in Churchill, Moe, Newborough, Morwell and Traralgon.
Wideband IP, the flagship Telstra product in the IP Solutions range, is capable of being delivered
virtually anywhere within Latrobe.
It provides high-speed data network services to link a company’s offices and has a unique ‘bandwidth on
demand’ feature, allowing customers to dynamically change the data access capacity of each connected
office, from 10Mbps up to 1Gbps, in real time.
At the touch of a virtual button, businesses can increase or decrease their network capacity, rather than
having to physically install new hardware and capacity. It suits both large and medium sized organisation,
especially where there is a variable need for extra network capacity.

A detailed profile of the services provided by Telstra is available as an attachment to this document.




                                                                                     Section 2: Latrobe: 14
                  Workforce issues
                  Labour Market
                  The latest information available specifically for the Latrobe catchment is sourced from the
                  Small Area Labour Market Data, produced by the Department of Employment Workplace Relations
                  and Small Business (DEWRSB).
                  The Small Area Labour Market Data shows that the unemployment rate for Latrobe as at 30 June 2003
                  was 9.5 per cent, which is 4 per cent lower than three years earlier but significantly higher than the rate
                  for Victoria, at 5.7 per cent.


                                             1999                 2000                   2001                   2002                   2003
                       Location               %                    %                      %                      %                      %

Latrobe Valley:   Moe & District                 17.3                  16.6                13.7                   12.0                   11.4
Unemployment      Morwell & District             17.4                  16.5                14.3                   12.7                   12.0
number and rate
                  Traralgon & District            9.8                   9.6                 7.9                    7.3                    6.8
as at 30 June
                         Balance                  9.3                   8.7                 7.1                    6.5                    6.4
                     Latrobe City                14.1                  13.5                11.4                   10.2                    9.5
                   All Gippsland                 10.8                  10.3                 8.1                    8.1                    6.0
                         Victoria                 7.6                   6.6                 6.0                    6.3                    5.7

                                                                         Source: Department of Employment, Workplace Relations and Small Business


                  For Gippsland wide indicators, the 2001 Census ABS data can provide the most up to date profile
                  of the labour force in the region.


                                    Workforce*                   Sex                                 Age of total workforce
                       Location      Number              Male          Female           15-19         20-34        35-54                   55+

Latrobe Valley:             Moe          5847            3295           2552             525             1976             2806             540
Employment               Morwell         5329            3045           2284             519             1869             2410             531
characteristics
                        Traralgon        9266            5137           4129             801            3364              4320             781
2001
                         Balance         8632            4913           3719             731             2074             4835             992
                     Latrobe City        29074           16390          12684           2576            9283              14371           2844
                   All Gippsland         98432          55025          43407            7638            27240            49926           13628
                         Victoria      2234075          1226657        1007418         151976          785398            1044542        252059

                                                                                                  Source: Australian Bureau of Statistics, Census 2001
                                                                                   * Includes employed and unemployed people in the labour force




                                                                                                                      Section 2: Latrobe: 15
Skilled Workforce
The number of persons employed in Latrobe has fluctuated significantly over the past four years.
In December 1997, there were 28,496 persons employed while in December 2001 the figure was 25,527.
The region has a good skill level base due to the industrial nature of the region. The presence
of regional tertiary institutions would also support development of intensive precincts.
In 2001, Latrobe’s key employment sectors were Retail Trade (17.0%), Manufacturing (12.2%),
Health and Community Services (10.7%), Education (8.2%) and Property and Business Services (7.5%).
Apart from the Property and Business Services sector, Latrobe recorded higher rates of employment in
these sectors compared to the Victorian average. The following table sets out all employment by industry
in the Latrobe Valley.



                                  Employment                             Number of          Percentage of
                                   by industry                           employees         total workforce

Latrobe Valley:              Agriculture, Forestry and Fishing               720                   2.82
Employment                                                 Mining            332                    1.3
by industry
                                                 Manufacturing               3,121                12.23
2001
                             Electricity, Gas and Water Supply              1,779                  6.97
                                                   Construction             1,834                  7.18
                                              Wholesale Trade                933                   3.65
                                                     Retail Trade           4,352                  17.05
                     Accommodation, Cafes and Restaurants                    1,016                 3.98
                                       Transport and Storage                 631                   2.47
                                     Communication Services                  293                   1.15
                                       Finance and Insurance                 684                   2.68
                              Property and Business Services                1,924                  7.54
                            Government Admin and Defence                    1,085                  4.25
                                                       Education             2,101                 8.23
                             Health and Community Services                  2,735                 10.71
                           Cultural and Recreational Services                423                   1.66
                                 Personal and Other Services                 945                    3.7
                                               Non Classifiable               191                  0.75
                                                      Not Stated             428                   1.68

                                                             Total         25,527                  100
                                     Source: Australian Bureau of Statistics Census 2001, Basic Community Profile




                                                                                               Section 2: Latrobe: 16
Useful Web Links:
Department of Industry, Innovation
and Regional Development
www.iird.vic.gov.au
Latrobe City Council
www.latrobe.vic.gov.au
Invest Victoria
www.invest.vic.gov.au
Gippsland.com -
Regional Information Portal
www.gippsland.com
Gippsland Water
www.gippswater.com.au
Electricity Retailer: TXU
www.txu.com.au
Gas Retailer: Origin Energy
www.originenergy.com.au
Monash University Gippsland
www.gippsland.monash.edu.au
Central Gippsland Institute of TAFE
www.gippstafe.vic.edu.au
 Surprising, substantial, diverse
                                      Production of this dossier
            www.latrobefirst.com.au        supported by DIIRD

				
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