William Hui, the Hong Kong-based businessman who spent $70 million in February to purchase Australia’s largest privately owned milk processing company, United Dairy Power (UDP) stated that he was willing to spend an additional $20 million in order to upgrade UDP’s capacity in order to expand into the milk powder business. As part of the company’s planned expansion, UDP could purchase additional farming properties in the future , once capacity is increased, or seek out business alliances in order to meet the growing demand for milk powder products in China. The infant formula market in China is set to double by 2017 to reach $25 billion, however Australia’s milk powder production fell by 22% over the past year leaving UDP to source additional milk supplies. At this time several Chinese state-owned and private companies are negotiating through the not-for-profit Dairy Connect to bankroll and construct milk powder plants in New South Wales, Australia. Mr. Hui states that just as the past five years have been for mining, the coming five years will be for dairy production as increasing numbers of Chinese investors make plays in the sector.
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