Cabonne Council bought the land for the factory in 2007 and the federal government gave the company Gelato Ingredients Manufacturers of Australia $163,000 in funding aimed at giving rural gourmet food producers a boost. 

The Central Western Daily understands Cabonne Council still owns the land, which includes a house, and a small parcel of land next to the factory and are in negotiations with the company about the financial assistance it has received.  

However, Cabonne Council declined to comment to the CWD.

An employee confirmed  the factory would be closing at the end of the month but would not comment further. 

Owner Giovanni “John” Di Francesca announced late last year the company would be expanding into the south coast town of Bulli Tops but would no be relocating. 

In December he said the Molong factory would continue to remain the company’s main manufacturer and distributor of ingredients. 

Business Enterprise Centre (BEC) executive officer Bruce Buchanan said the closure should not be looked at as a reason to stop rural financial assistance to companies.

“The idea behind the funding is to make it attractive to businesses to want to relocate to smaller towns and cities,” he said.

“It is very sad and disappointing they weren’t able to be sustainable. 

“Especially in a smaller town like Molong ... the flow-on effect will be very bad.”

Mr Buchanan said businesses everywhere were suffering.

“You look down the main street of Orange and there are vacant retail shops, it is just the economic climate,” Mr Buchanan said. 

The BEC puts businesses in touch with government authorities in order to secure grants and Mr Buchanan said they would continue to do so despite the closure of the factory which between council, state and federal governments received around $200,000.

nicole.kuter@fairfaxmedia.com.au