Liu Yonghao, the chairman of Chinese agribusiness giant New Hope Group, says its new alliance with two of the biggest families in the Australian dairy industry is about improving food quality and safety in China and introducing more Australian agricultural products to Chinese consumers.
Mr Liu, one of the richest men in China, made a rare trip to Australia late last week to visit the Lachlan Valley-based Moxey Farms, after New Hope earlier this year joined with Moxey, the Perich family’s Leppington Pastoral Company and the listed Freedom Foods in a consortium called Australian Fresh Milk Holdings.
AFMH wants to ramp up milk production destined for the local and Chinese markets and is expected to inject about $80 million into Moxey Farms and other greenfield dairy sites.
Moxey, headed by NSW dairy industry matriarch Janet Moxey, had been seeking a strategic investor for more than a year for its operation that milks about 3700 cows, producing 50 million litres annually.
Moxey is also a major supplier of milk to a2 Milk, which is being stalked by Freedom and the US-listed Dean Foods Group following their move to make an unsolicited takeover approach to the company last month.
At the official signing ceremony for the AFMH deal last Friday, which was attended by members of the Perich and Moxey families and Freedom CEO Rory Macleod, Mr Liu made his first comments on the deal in which he said the partners planned to build the first 10,000-head dairy farm in Australia. Mr Liu also said the partners would establish another two 10,000-head dairy farms in the next 10years, by which he claimed AFMH would be the most competitive and influential dairy cow-raising company in Australia with annual raw milk output of more than 200 million litres.
Mr Liu is a key Chinese partner in the Sino-Australia 100-Year Agricultural and Food Safety Partnership, or ASA 100, an initiative founded in September last year by mining billionaire Andrew Forrest to promote co-operation in agriculture.
“Back to November last year, when chairman Xi (Jinping) visited Australia, together with a group of agricultural companies we established ASA100 with FMG,” Mr Liu said.
“We hope through 100 years’ efforts, we can improve the food safety and quality of animal protein products (and) introduce more Australian agricultural resources into Chinese to have a win-win situation.”
New Hope Group announced last year it would invest $500m into Australian agribusiness, and Mr Liu revealed the majority of the fund would support New Hope Dairy’s projects in Australia.
He added that the in-depth co-operation with the Australian companies followed the Chinese government’s “One Belt and One Road Initiative’’ announced earlier this year.
The initiative will establish new trade routes linking Asia, Europe and Africa.
The China-Australia free trade agreement will also reduce dairy product import duties to zero in four years.
“The two counties are relatively complemented. Australia is a large country but only with 20 million population. After the mining industry, agricultural business will be the other engine for Australian economy,” Mr Liu said.
Separately the Chinese government-backed Beijing Agricultural Investment Fund committed to spend $3 billion on Australian dairy, beef, lamb and aquaculture.