New Zealand milk producer A2 Corporation Limited has annouced that construction is underway on a new processing facility in south-west Sydney, to meet the growing demand for a2 Milk in Australia.

Production at the $7.5 million dollar facility, the first to be operated by A2 in addition to using contract processors, is expected to begin in January 2012. Chairman Cliff Cook says the commissioning will be timely.

"Our a2 Milk business in Australia continues to grow rapidly and the development of our own processing facility will allow for the continued expansion of the business.

Sales growth has exceeded expectations in the six months to 30 June, 2011," said Cook. A2 said the new Sydney plant will comprise a medium-sized processing facility, incorporating the most advanced proven processing technologies, designed to achieve both the highest quality standard of fresh milk and at the same time competitive operating costs. The design also minimizes both the use of utilities and generation of waste.

The company said the new plant included a number of feaures, including modular design, a purpose built food-grade factory of approximately 2,500 sq metres building area, segregated areas for raw materials, processing, packaging and cooling, milk collection facilities to accommodate B-Double train trucks and staff amenities, laboratory, offices and car parking.

A2 said the facility will process approximately 10 million litres of milk per annum initially with capacity to process increased volumes over time, with the site located near motorways allowing for the efficient transportation of both raw milk and finished products.