Chinese-backed consortium wants to buy up south-west dairy farms

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The Standard | 17 October 2014

Chinese-backed consortium wants to buy up south-west dairy farms

By EVERARD HIMMELREICH

A consortium hoping to buy dozens of south-west dairy farms aims to operate “on a scale not considered in Australia before,” a spokesman for the consortium says.

Linear Capital managing director Troy Harper said the consortium, which has links to Chinese investors, aimed to be a major new player in the regional dairy industry and be “vertically integated” with its own dairy processing plants and training facility.

Mr Harper said Warrnambool, Colac and Mount Gambier were among locations being considered for processing plants.

He said an approach had been made to the state government to lease Glenormiston College near Terang to provide dairy industry training for both local and overseas workers for the project. Mr Harper declined to confirm media reports the consortium was seeking to buy between 40-50 dairy farms but said “it’s not going to be small”.

He said he was unable to confirm any aspects of the project but hoped to do so in a few weeks’ time.

In a statement on its website, the Tasmania-based private investment firm said it was preparing proposals for a major development of infant formula production plants in Victoria and NSW that would export to China.

The project was being developed in a joint venture with the Australian firm Farm Gate 88 Pty Ltd, the company said.

Linear Capital said it was in negotiation with major Chinese state-owned enterprises to invest in farms and processing plants in Victoria and New South Wales.

“Linear Capital has sourced substantial milk supplies direct from regional farms for long-term contracts in Victoria and Tasmania, and in conjunction with Farm Gate 88 Pty Ltd through their operational facilities in NSW, substantial milk supplies from the Riverina region.

“Linear Capital through these strategic alliances are seeking further alliances with Chinese enterprises to cooperate in investment, production and technology,” the statement said.

Mr Harper told The Standard it believed the key to improving the profitability of many dairy farms was to incorporate them into a vertical integration system that also included processing plants and product distribution.

Warrnambool, Colac and Mount Gambier were “good locations” for processing plants, he said.

The consortium’s plans have met with a wary reception from many local farmers after approaches by other investment groups interested in corporate agriculture fell through.

One Scotts Creek dairy farmer told The Standard he had been asked by a representative of a Western Victorian real estate firm about three months ago if he was interested in selling but had heard nothing since.

The real estate agent had said he was acting on behalf of investors who were considering buying a number of dairy farms, he said.

The farmer, who did not wish to be named, said many of his neighbours had also been approached.

He said he would not get excited until they “showed me the money” and he expected other farmers had a similar attitude.
Original source: The Standard
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