Australian dairy attracts Chinese interest

30 Sep 2014

The creation of a $3 billion agricultural investment fund by two Chinese multinationals capped an exciting week for Australia’s dairy industry, centred on Dairy Australia’s inaugural Dairy Farm Investment Forum at Melbourne’s Federation Square.

A visiting Chinese delegation, supported by Austrade and state government partners, joined 300 local and international attendees at the one-day forum which highlighted the competitive advantages of Australia’s A$13 billion dairy industry.

Following the forum, held on 15 September, Trade and Investment Minister Andrew Robb witnessed the founding of the Beijing Australia Agricultural Resource Cooperative Development Fund, a joint initiative of the state-owned Beijing Agricultural Investment Fund and Shenzhen-based Yuhu Agriculture Investment Group.

The Development Fund is looking to invest A$3 billion in agricultural projects which include dairy, in particular infant formula.

Delivering the forum’s opening address, Mr Robb, said encouraging investment in Australia’s food and agribusiness industries was a national investment priority.

Mr Robb advised that if Australia’s dairy industry was to reach its potential, it must remain a leader in production, new products, logistics and marketing.

‘New investment and the innovation, capacity and new perspectives that comes with it, is critical to helping drive this,’ he said.

Ian Halliday, Dairy Australia Managing Director said, ‘Australian dairy has a worldwide reputation for being top quality and our clean, green and safe image is highly prized by the fast-growing markets of Asia.’

‘The potential for our industry to grow profitably and to supply the burgeoning demand of overseas markets such as China is very real but what is needed is a bigger commitment from investors,’ he said in a media statement.

Mr Robb noted Australia’s dairy industry is already attracting very strong investment interest from abroad. In recent months Canada’s Saputo acquired Warrnambool Cheese and Butter, Hong Kong interests bought United Dairy Power and China’s Bright Food Group invested in Mundella Foods. These complement existing investments in dairy processing by multinationals from Japan, France, New Zealand, the UK and Switzerland.

Following the Dairy Farm Investment Forum, Austrade led the delegation of Chinese companies on a tour of farms, research facilities and milk processing plants across Victoria, Tasmania, and South Australia. Companies represented included the Hangzhou Wahaha Group, CK Life Sciences, Ningbo Dairy Group, Greenland Investment Holdings and China Development Bank.

Australian dairy is the fourth largest exporter of dairy in the world accounting for seven per cent of world trade, and directly employs 43,000 people.

Greater China accounts for over 16 per cent of Australia’s total dairy exports and is Australia’s largest market by both volume and value.