October 6, 2004

Australian Milk Prices Boosted With Singapore Deal

Australia's dairy farmers can look forward to a five-cent increase in milk prices thanks to a new Challenge Dairy Co-operative joint venture with QAF Singapore.

"We've attracted $8 million capital into the business with another $5.3 million guaranteed on top of that," Challenge chairperson Larry Brennan said.

QAF Singapore is a public-listed company on the stock exchange, with significant interests in consumer food manufacturing, distribution and marketing, including dairy.

"We're going to embark on a $12 million expenditure program in the next three years and upgrade Capel," Mr Brennan said.

This, he said, would allow them to have more value-added products such as wrapped, sliced and shredded cheese, while the minimum price for milk could rise to 27 cents.

QAF will have 51 per cent of shares in the venture and Challenge 49 per cent.

The venture is planned to start on October 18.