December 3, 2012

 

 

The sale of the four aggregated dairy farms, belonging to private New Zealander firm, Rosmerta, has attracted interest from Chinese companies.

 

Large Chinese beverage company Wahaha, known to be keen to buy Australian dairy farms that can supply milk powder to China, is expected to visit the four Lactanz dairies early next year.

 

The chairman of Hangzhou Wahaha Group, Zong Qinghou, made it known early this year that he was targeting Australian dairy assets. After working with the local government, Zong announced a plan to spend up to US$220 million on dairy farms and a new milk powder plant in WA to supply China.

 

Zong said that the high quality and low price of Australian milk made investment in dairy farms attractive.

 

"(China) consumes 50,000 tonnes of milk powder a year, half of that imported,'' he said.

 

"Our investment in Australia's dairy farms and related industry will guarantee stable supplies of quality milk powder.''

 

Wahaha is also investigating the potential of part-buying or investing in Tasmania's largest dairy operation, run by the Van Diemen's Land company.

 

Chinese state-owned company, the China Investment Corporation, also has expressed interest in the northwest Tasmanian venture, as had Macquarie Bank's specialist dairy farming international fund, McMahon Dairies.

 

Also for sale in Tasmania for about US$90 million and attracting Chinese interest is another large dairying operation, Little Lion.

 

Its sale includes dairies and a stake in Smithton milk powder factory, Tasmanian Dairy Products, partly owned by Murray Goulburn.

 

The sale of Lactanz Dairies follows the unexpected collapse of the earlier sale of another of WA's largest dairy farms, 900 hectares Ravenhill Dairy, to a Chinese buyer. Chinese investors had signed a deal in January to purchase Ravenhill Dairy, near Albany, but defaulted on the sale.

 

The transaction was due to be settled in August, but the Chinese investors failed to complete the sale despite several deadline extensions, and despite paying and losing a 10% deposit.

 

Chinese interest in the potential expansion of Western Australia's agriculture remains strong.

 

Last week, Chinese property development company, Shanghai Zhongfu, won the right to lease and develop 13,200 hectares of prime irrigated country in the East Kimberley, part of the US$1 billion Ord irrigation scheme.

 

Zhongfu chairman Wu Ngai Pui plans to invest US$700 million in the Kununurra area, turning it into a vast new sugar cane growing region complete with a US$400 million sugar mill producing sugar and ethanol, to be exported from a redeveloped Wyndham port.

 

The Rosmerta dairy business, located in the coastal Scott River region between Margaret River and Pemberton, is operated by four New Zealander share-farming families on an individual farm basis.

 

It has been assessed as having the capacity to increase production and cow numbers by at least 50%, by developing more land and moving to a corporate farming model.

 

The Lactanz dairy farms supply the fresh milk market in Western Australia.

 

In Queensland, foreign buyers are being sought for one of Australia's biggest strawberry farming businesses, Gowinta, for sale after going into liquidation with debts of more than US$17 million.