China in talks to acquire stake in Australian dairy company

China Investment Corporation, a sovereign wealth fund owned by the Chinese government, is planning to acquire a stake in Van Diemen’s Land (VDL), a leading dairy farming company in Australia.

Van Diemen’s Land (VDL), based in Tasmania, has 25,000 dairy cows and 6,500 beef cattle, and operates 27 dairy farms spanning an area of 19,000ha.

Currently, the company is in talks with several parties to raise A$180m ($187.51m) to double its milk production and workforce.

China Investment, which holds about $410bn in assets, has already approached Australia’s Foreign Investment Review Board (FIRB) for preliminary consultations over the VDL deal before submitting a formal application.

The FIRB is responsible for examining proposals by foreign interests to undertake direct investment in Australia.

This move by China Investment comes after Tasmanian Premier Lara Giddings visited Beijing, China, as part of a trade mission to promote trade and investment opportunities in the state.

Commenting on the trade mission, Lara Giddings said, "I welcome the China Investment Corporation’s interest in Tasmania and stand ready to work with them in any way possible."

Earlier in September, China Investment sent executives to evaluate two dairy operations in Tasmania – Little Lion and VDL.

China Investment, based in Beijing, seeks to make long-term investments and usually does not hold a controlling stake in its investments, according to the fund’s website.

China is encouraging its companies to invest globally, to boost food security in order to feed its population of 1.3 billion.

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Image: China Investment’s deal is expected to support VDL’s plan to double its milk production and workforce. Photo: Alessandro Paiva.