The New Zealand owners of Australia’s largest dairy farming operation, Tasmania-based Van Diemen’s Land Company (VDL), have placed the operation on the market.

 

Managed for the council by Taranaki Investment Management Limited (TIML), the network of 25 farms is estimated to be worth approximately $250 million, and is expected to attract the attention of sovereign wealth funds, institutional investors, various trade investors, and agricultural funds.

 

"Given all of the positive factors for the business and the sector in Australia, the TIML board believes the time is right to put the asset to the market and has commenced a sales process with its advisors," said TIML chief executive, Mike Trousselot.

 

Although it was not released whether there were any interested buyers engaged in talks as of yet, the business and assets are expected to be sold by the end of the financial year due to the level of interest in major Australian agricultural holdings.

 

"There is significant domestic and international interest in Australian agricultural assets. That's given the quality of the assets, their proximity to markets and strong domestic demand and also the weight of money looking for alternative assets away from bonds and equities,” said Mr. Trousselot. "That's the environment we are in and people are looking at Australia."

 

Of course, the elephant in the room is whether any parties from China are in the running to acquire VDL, and given developments throughout the recent past it is easy to speculate that there will be. In 2013, Australian media reported that the Chinese Investment Corporation (CIC) was conducting talks with Tasmanian Premier, Lara Giddings, about acquiring VDL, and in June 2014, Andrew Judd, the mayor of New Plymouth, stated that he believed a Chinese syndicate was engaged in talks to buy a stake in the operation.

 

Whatever direction the sale takes, Mr. Trousselot said that VDL was showing strong performance. Since acquiring the business, milk solids have increased 150%, with output reaching 8 million kilos this year – up from an initial output of 3 million kilos; cash flow is attractive and the cattle and farms are performing well.