China’s largest privately owned agribusiness, New Hope Group, and Australia’s Petrich family are seeking to acquire the $100 million Moxey Dairy Farms dairy, which has been on the market since October 2014, as their first join transaction. Offshore interest in the Australian dairy sector is seeing a resurgence of interest, particularly after the signing of the China free trade agreement between the two countries last year.
Although beef and powdered milk have been in demand in China in recent years, fresh milk has been gaining consumer attention. Chinese fresh milk imports have increased 10-fold since 2010, and grew 74% in 2014 alone. In response companies such as Norco are air-freighting fresh milk into Shanghai where it sells for $7.60 per liter.
New Hope, which made its first investment in Australian agriculture in 2013 when it bought a controlling stake in Queensland’s Kilcoy abattoir, has earmarked $500 million for investment into Australia’s ag sector over the next ten years, the majority of which will be invested with the Petrich family in the dairy sector.
New Hope is China’s largest producer of feed grain, and controls some of the country’s biggest dairy, pork, red meat, and poultry brands. The Petrich family runs one of Australia’s largest dairies and has supply agreements with China’s Bright Foods and the Shenzhen JiaLiLe Food Company. The Moxey Dairy milks 3,500 cows producing 50 million liters of milk per year, generating earnings before interest and tax of approximately $12 million.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service