PAINT maker DuluxGroup has unveiled plans to build a new factory in Melbourne, creating scores of jobs.

Dulux revealed yesterday it would spend about $165 million on the new factory for water-based decorative paints.

It will be built at the Merrifield estate in Melbourne’s north, with construction to start late this year and finish in 2017.

The project is part of a broader shake-up at Dulux, which is cutting jobs interstate as it consolidates operations.

Up to 60 jobs may go at the paint factory at Rocklea in Brisbane’s south as most production moves to Melbourne.

And as many as 80 jobs could be cut at Dulux’s two distribution centres at Padstow and Moorebank in Sydney, to be closed to make way for a new facility in that city.

Lindsay Fox’s logistics group Linfox will build, own and operate the new distribution centre in Sydney.

It is scheduled to start operating in mid to late 2016, and Linfox is expected to employ some of the Dulux staff.

Dulux managing director Patrick Houlihan said that once the jobs cuts, redeployments and potential hirings by Linfox were complete, the impact on overall job numbers hopefully would be small.

“Overall, these changes we are announcing across Australia are essentially head-countneutral,” Mr Houlihan said yesterday.

The group also plans to sell a former paint factory at Glen Waverley.

Its new plant in Melbourne will create 64 new jobs.

Dulux’s Australian operations employ about 3000 people, including about 1000 in Victoria, 1000 in New South Wales and about 630 in Queensland.

The new Melbourne factory will produce nearly all of Dulux’s water-based decorative paints, which are currently manufactured at Rocklea.

Cost savings were expected from automation, better raw material utilisation and freight savings. Dulux will retain the Rocklea factory, but run it with fewer staff, who will produce solvent-based paints.

Dulux shares closed up 2.3 per cent, or 14c, at $6.36.