AUSTRALIA’S only publicly-listed milk producer has bought a third south-west farm as it eyes up to 13 more dairy properties across the south-west’s “golden triangle” region.
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The purchase steps up the aggregation plans for district dairy farms being pursued by investors, some of which have overseas links.
In an ASX announcement, the Australian Dairy Farms Group (ADFG) confirmed it had signed a contract to buy the 244-hectare (603-acre) Ignatios dairy farm on Maddens Bridge Road at Glenfyne.
The company said it had bought the farm at a mortgagee auction last Friday for $1,869,300 or $7661 per hectare ($3100 an acre).
Director Adrian Rowley said the company was listed on October 27 and about 30 per cent of its shares were bought by Hong Kong investment funds.
He said the buy-up of ADFG shares by those investors was a strong indication that China recognised the growth potential of the Australian dairy industry.
Mr Rowley said the company intended to use the Glenfyne farm as support for the two farms it acquired at Brucknell earlier this year.
Mr Rowley said the company was acquiring a portfolio of dairy farms to target the premium milk prices being offered by dairy processors for high-volume supplies.
ADFG’s push is separate to another farm aggregation plan proposed by Tasmanian private investment firm Linear Capital, which is supported by Chinese investors.
That proposal involves vertical integration, with the company wanting to buy up to 50 south-west dairy farms to supply processing plants it aims to build in the region.
The processing plants would produce value-added products for overseas markets.
While the idea has aroused plenty of attention, including a farmer meeting tonight in Warrnambool, it is understood the firm has not yet bought any farms.
Mr Rowley said ADFG planned to acquire five to six dairy farms during the next two years to produce about 50 million litres of milk.
He said the company was carrying out due diligence, with a view to purchase another two to three farms in the “golden triangle” area between Warrnambool and Colac, south of the Princes Highway.
Its long-term goal is to acquire 14-16 farms.
“It is apparent that numerous good-quality farms remain available despite reported heightened interest in the dairy industry in recent months from other parties,” the company said in its ASX statement.
Mr Rowley said the company planned to run about 1200 cows across its three farms, producing about 7.5 million litres of milk.
