Friday, July 1, 2022

Australia on the shopping list too

The New Zealand dairy landscape is not the only one succumbing to Chinese investment. Western Australia (WA) dairy farmers are also contemplating an environment where Chinese ownership of land, processing plants and companies is looking imminent. The state’s dairy industry has been abuzz with speculation that Chinese investment was likely from Chinese drinks company Wahaha Group, owned by that country’s richest man billionaire, Zong Quinghou. Zong visited the south-western WA town of Busselton in September 2012 to discuss the possibility of establishing a A$200 million powder plant. The company has also been rumoured to be considering land and site purchases around NZ.

But with only 170 dairy farmers and around 50,000 cows in the state’s southwest, some in WA are surprised at plans to develop a powder facility in the state.

“For us here powder is not a great fit," chair of WA Farmers dairy council Phil Depiazzi said. "We don't have enough milk for the population now. I would have thought Tasmania or even NZ would offer larger opportunities.”

He said the state was struggling to supply fresh milk to Perth all year round and at present is only able to supply fully for six months.

Other Chinese investment has included Bright Foods Group’s purchase of the Margaret River Dairy Company in November 2011, and a Fremantle-based olive oil company.

In November 2012 a group of Chinese investors reneged on the sale of one of the state’s largest dairy units, the 900ha Ravenhill property near Albany in the state’s south. The family-owned property was understood to have been sold to the investors for $16m, and included the farm’s dairy products business.

Wahaha has shown an interest in a large four-property enterprise owned by NZ investors. The Scott River property presently has dairy cows owned by processing company Brownes.

“That could be quite a smart move to buy that, given the cows are already there. You cannot bring cows into WA,” Depiazzi said.

Farmers in WA had mixed views on the prospect of Chinese ownership of land.

“We are looking for funds, and if someone is prepared to poke money into it, we may be looking at different options for farming, including leasing land off them.”

Farmers may have been “clobbered” by the supermarket wars on milk prices, but dairying still offered the best returns in the southwest for farming.

“There is a bucket load of land here suitable for dairying,” Depiazzi said.

He pointed to a recent Wesfarmers “Fresh Opportunity” analysis of WA dairying which highlighted how the state’s milk production has to double over the next 10 years to meet local and Asian export demand.

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