MORE farms are set to be purchased by Camperdown Dairy International as the fledgling processor builds on a successful Chinese deal.
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Camperdown Dairy International signed a $9 billion deal last week to supply infant formula to China over the coming decade, accelerating plans to establish a new processing site on the site of the town’s old Bonlac factory.
Great Wall Capital Trading director Damien Weis helped secure the Chinese deal for Camperdown Dairy.
The Hong Kong-based businessman said Camperdown’s “vertically integrated” model, meaning the company had control over all aspects of production, appealed to Chinese consumers.
Importation of infant formula into China has grown at an astonishing rate since the 2008 melamine scare when Chinese made powdered milk killed six children and hospitalised thousands.
“Camperdown has a great story in that the consumer knows the company has control from the farm to the packaging and everything in between,” Mr Weis said. “That vertically integrated model is very attractive.
“Brand name trust is so important and consumers are willing to pay a premium for it.”
The Camperdown Dairy deal is set to triple Australia’s existing exports of infant formula from five million 900 gram tins to 15 million tins in the coming years.
The company owned by mining entrepreneur Bill McDonald has already purchased a massive dairy farm in the Mount Gambier region and is set to expand its landholdings in the coming months.
Apart from the Camperdown factory, the company also owns an operational milk powder plant and cannery in Melbourne’s south-eastern suburbs.
“Having ownership of the production process has allowed Camperdown to set up a tracking service,” Mr Weis said.
“With the swipe of a smartphone, the customer can find out the details on every step of the process back to when the cows were milked.”
Mr Weis said the way Chinese families purchase infant formula was quite different to Australia as supermarkets played a smaller role.
“The breakdown of sales in China is roughly 30 per cent purchased online, 30 per cent in supermarkets and the remaining 40 per cent is fragmented into different sorts of retailers, for instance, mother-and-baby-shops,” he said.
