West Australia-based carbon abatement company, Carbon Conscious is expanding its reach into the fresh diary supply chain, according to Business News.

 

The company announced it has signed a Memorandum of Understanding (MOU) with Australian and Chinese-backed Green Lake dairy company, which holds a long-term supply contract to supply Australian products to China through a growing network of 150 stores in the Province of Henan. Green Lake is also planning the establishment of a chain of 300 concept stores in China that will specialize in offering Australian branded products, to be named “Capel Farm”. Through the MOU, Carbon Conscious will gain access to the Chinese market where fresh Australian milk retails for between $8 and $10 per liter.

 

Carbon Conscious has also announced a non-binding agreement to secure a 20-year lease on an existing dairy property including a rotating milking plant in South West, according to Farm Weekly. The company plans to begin with an initial cow herd of 500 head, but to expand the herd to 2,500 head over time. In the future the company plans to eventually create its own label specifically targeted for consumers in Henan province, which has a total population of 100 million and a potential customer base for Australian fresh milk of 10 million.

 

“We’ve been considering expanding and moving into dairy but didn’t want to rely on the local milk prices,” said Andrew McBain, executive director of Carbon Conscious, reports Farm Weekly. “We do have bigger plans but we’ve taken this opportunity as a first step to access that premium dairy market in China, through the extensive customer reach that Green Lake’s supply chain offers."

 

As climate change pressures governments to change their carbon-based policies, the level of political risk associated with the carbon abatement business increases. In contrast, the dairy sector has lower political risk, therefore providing another incentive for teh company to expand into dairy, reports Farm Weekly. Desptire this, the company still plans on continuing its carbon abatement business, which generated $3 million in 2015. 

 

To reflect its expanding breadth of interests to include agribusiness, Carbon Conscious will also change its name to Alterra Limited.