Australian billionaire invests $435m in dairy venture to export infant formula to China

Australia’s mining billionaire Gina Rinehart is investing A$500m ($435m) in a dairy joint venture to produce infant milk formula for China.

The venture will be called Hope Dairies, established with the acquisition of 5,000ha of farmland in Queensland’s South Burnett and construction of a processing plant in Mary Valley.

The venture plans to begin exports in the second half of 2016 and might produce an estimated 30,000mt of formula annually.

Hope Dairies is controlled by Reinhart’s Hancock Prospecting.

With the relaxation of the one-child policy in China, it is expected that the demand for infant food will almost double in the next three years.

Queensland’s Dairyfarmers’ Organisation has been working with Rinehart’s firm and the state government for months. It said that this project would include major investments in farms and milk processing facilities in the state.

Reuters quoted Queensland Dairyfarmers’ Organisation President Brian Tessman as saying: "China presents a real opportunity for our industry to form close partnerships to supply high-quality dairy products to their growing population, and in particular infant formula.

"The project is looking at properties in the wider Southeastern Queensland region in places like South Burnett to provide other support farms for the project."

This proposal comes right after Rinehart’s recent purchase of a 50% stake in two Western Australian cattle stations.

Project spokesman Jason Morrison was quoted by ABC as saying: "It’ll be a big thing, not just because it will revitalise the industry but it’ll inject a bit of hope into it, as well and an enormous amount of export revenue for Australia.

"Australia’s reputation and the Queensland dairy reputation is incredible. And so we have this premium product, we have an avenue to get it there, we’re going to do the complete value adding in Australia. It’s processing, it’s canning, it’s exporting, right down to the marketing of it, so it’s a real integrated program and strategy."

Past food scandals in China has led to spurt in demand for quality infant formula in the country.

---

Image: Gina Rinehart’s investment in the joint venture will help in exporting nearly 30,000mt of infant formula annually. Photo: courtesy of Naypong/freedigitalphotos.net.