China consumes 50,000 tonnes of milk powder annually, half of which is imported, industry official says

SYDNEY , November 30, 2012 () – WESTERN Australia's largest dairying business, Lactanz Dairies, is for sale with a price tag of $30 million.

The sale of the four aggregated dairy farms owned by private New Zealand company Rosmerta, milking more than 4000 cows, is attracting interest from Chinese as well as eastern states buyers.

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 WA government, Mr Zong announced a plan to spend up to $220m on dairy farms and a new milk powder plant in WA to supply China.

Mr Zong told China Daily 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 $90m 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, part-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, 900ha 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 per cent deposit.

But Chinese interest in the potential expansion of WA agriculture remains strong.

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

Zhongfu chairman Wu Ngai Pui plans to invest $700m in the Kununurra area, turning it into a vast new sugar cane growing region complete with a $400m 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 NZ 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 per cent, by developing more land and moving to a corporate farming model.

The four farms cover a total of 2340ha, with about 900ha of irrigated pasture, 800ha of dryland and the rest undeveloped country. There is the potential to restructure the four nearby farms internally into the preferred corporate model of several smaller dairy farms of about 350ha each, individually milking 900 to 1000 cows.

The Lactanz dairy farms supply the fresh milk market in WA.

Last year the aggregate business produced 1,293,500kg of milk solids and sold significant numbers of young heifers into the local WA market.

Elders rural property specialist Noel Jones hopes to sell the prime farm properties as an ongoing single business -- individually the farms are known as Iley, Fouracres, Hartridge and Fox Farm -- before June next year.

Meanwhile, 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 $17m. Gowinta grows and packs 70,000 punnets a day during the strawberry season.

It also grows raspberries, lychees and pineapples.

(c) 2012 News Limited

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