Food manufacturer George Weston Foods will build a $132.9 million Mauri flour mill at an eight hectare site at the Ballarat West Employment Zone in Mitchell Park.
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Financially supported by the state government, 46 jobs will be moved from the mill's former home in North Melbourne to Ballarat.
George Weston Foods chief executive Stuart Grainger said the BWEZ site was attractive because of its direct rail interface - the chosen site is adjacent to rail line, which will be the future home of an inter-modal freight hub.
The freight hub project, a key part of the initial BWEZ pitch, has received $9.1 million in federal funding but has not begun construction yet.
Mr Grainger said the new mill will bring in grain from northern and central Victoria, and supply operations across the state.
"Ballarat represented the ideal opportunity," he said.
"We're a little bit sad to be leaving North Melbourne, we've been there for 150 years, but it's becoming more and more encroached with urbanisation and the Arden Street project.
"We hope as many as possible will move from North Melbourne, it's quite an aged workforce, so we suspect there may be some people who retire, but we hope to move the skill base, as flour milling is a very technical subject - there will be new employment as well, and particularly during the build phase."
Minister for Industry Support and Recovery Martin Pakula visited the BWEZ site on Friday, describing the project as a "vote of confidence" in Ballarat.
However, he would not disclose how much financial support the state government would be providing to the company.
"This process was incredibly competitive, (George Weston Food) were talking to other states," he said.
"The minute we start giving away what we do to attract these investments to Victoria is the same day that other states start to cut our lunch - we're not in the business of giving them a heads up, but we have worked very closely with George Weston Foods and we're very excited they chose to make this investment here in Victoria."
He also deflected questions on further state government support for the freight hub itself.
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"I'm sure the Minister for Ports and Freight would be able to speak about that in greater detail," he said.
"Those sort of announcements that generally happen in the lead up to elections, they are things for another day, I think the contribution we've made to support George Weston Food building that mill here in Ballarat is a very concrete way of demonstrating our commitment to this precinct."
Construction on the mill is expected to begin by mid-2023.
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