Wednesday, July 6, 2022

Kiwi behind major China dairy project

Six thousand heifers from Australia have arrived in China for a project spearheaded by Howard Moore, a biotechnology entrepreneur and investor whose CV includes two decades in the New Zealand dairy industry.

The former technical manager at NZ Co-Op Dairy Co and the Dairy Board and corporate technical manager at Kiwi Dairies is now managing director of Taranaki Dairy Technologies.

His company’s first China project involves turning 50,000 hectares of natural grassland in the Heilongjiana province into dairy farms.

The first three farms are almost complete and Moore expects the first heifers – shipped in from Australia – to be delivered to two of the farms in mid-November.

Moore told The New Zealand Farmers Weekly he set up Taranaki Dairy Technologies two years ago as a private NZ company with 20 shareholders from NZ, China and the USA.

Its purpose is “to build farming businesses in China using the world’s best technologies”.

“But our greatest strength is in forage production from grasslands.”

Moore intends the company be the vehicle for further investment in Chinese dairy farms.

The first project is the result of an approach from Fortune Link, a private equity and venture capital firm specialising in growth capital investments in middle market companies and angel investments. It typically invests in companies based in China.

Local government authorities at county level in Heilongjiana had said they would provide natural grassland on attractive financial terms to someone willing to start dairy farming on a large scale.

Fortune Link responded and sought partners in NZ.

Because Fonterra was developing farms elsewhere in China and was not interested in the proposal, Fortune Link asked him to become involved, Moore said.

He developed the business plan, Fortune Link raised 100 million renmimbi (around NZ$20 million) and the Heihe Zhongxing Animal Husbandry Company was established to build the three farms.

By 2015 it hopes to have about 35,000 cows.

Taranaki Dairy Technologies is a minority shareholder and Moore said it was providing the know-how on developing grassland for dairying.

He is seeking other areas of low-cost grassland in China along with partners and investors to develop farms.

Moore is aiming to attract “wealthy investors who wish to invest in a company that is growing a business in agriculture in China based on an area where NZ has a real strength – forage production from pasture.”

He is hoping to raise NZ$2.5 million.

He was reluctant to give Farmers Weekly much detail on cost breakdown for the HZAH project.

But total investment by year's end would be over NZ$100m.

Potential returns to interested investors would be disclosed on a confidential basis, he said.

“However, because of our significant cost advantage through low cost feed, profit margins are forecast to be higher than companies relying on bought in feed. Ultimately this will be reflected in returns to investors.”

The conventional model for dairying in China entails building barns on relatively small areas of land and buying in the feed.

*More on Howard Moore’s China venture in the November issue of Dairy Exporter.

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