The 12 employees of the Chinese-owned Blue Lake Dairy Group at Tantanoola were stood down on Thursday afternoon and production has ceased.

The workers were told rent is owed on the Princes Highway facility which has created infant milk formula for several years for domestic and overseas markets.

The SE Voice has been told that security personnel went to the factory and locksmiths changed the locks on doors and gates.

A worker has told this newspaper that more may be known this week.

The long-time freehold owner is McDonnell Industrial Pty Ltd which is a South East family-owned company.

Spokesperson Ian McDonnell declined to comment

The SE Voice has also approached the BLDG.

The BLDG began blending base milk powder into infant formula in 2016 and its further stages and major capital investment have yet to come to fruition.

There have been proposals to convert “wet milk” into powder requiring a workforce of 150.

The Tantanoola site was erected by the State Government over 15 years ago as a purpose-built potato chip plant.

It only operated for several months before the Southern Food Group experienced financial difficulties.

The plant was then purchased from the State Government by the Mount Gambier family business after the failure of the Starfries chip enterprise.

Some timber processing was done onsite but the McDonnell family company has since consolidated its operations at its other locations.

Between 2011 and 2015, a portion of the premises was leased as a depot by the South Australian Lobster Company.

The company then bought an operational depot at Robe as well as the Rapp family’s former Ocean Foods plant at Southend and vacated the Tantanoola premises.

It is understood the last dairy processing plant at Tantanoola was a cheese factory which opened in 1886 and closed in the 1960s.