Chinese firm acquires Australian dairy company

The sale of one of Australia’s largest dairy operations is one step closer to being finalised. This week, Australia’s government approved the sale of Van Diemen’s Land Company to Chinese businessman Lu Xianfeng. But news of the deal has also renewed concerns about increasing foreign investment in Australia.

 

For about $200 million USD - Chinese businessman Lu Xianfeng will get an operation with more than 19,000 milking cows over 25 dairy farms. Jim Harrowell - who heads the New South Wales branch of the Australia China Business Council - says the benefits of the deal go beyond the company and its new owner.

 

"This presents a huge opportunity for Tasmania, it presents a huge influx of capital into Tasmania, it’s more security for the people who work there, it’s clearly producing a product which is high in demand for export purposes it’s a win win for everybody," Jim Harrowell, president of NSW ACBC, said.

 

After closely reviewing the deal and future plans for the Van Diemen’s Land Company - Australia’s Foreign Investment Review Board approved the sale.

 

"This is a very big welcomed sign from the Chinese investor that they can participate in the agriculture to produce some of the products to the market," Dominic Ong with Knight Frank Australia said.

 

But not everyone seems happy about the deal. At least one politician has raised concerns that the sale to a foreign investor could impact food security in Australia.

 

"I must confess the food security concerns at all, this is a dairy farm in Tasmania that’s been producing milk for a very long time, it’s high quality milk and there is no issue with food security," Harrowell said.

 

Late last year - Australia’s government blocked the sale of the country’s largest cattle station to foreign investors - saying it was contrary to the country’s national interests.

 

And the leasing of Darwin’s Port last year to Chinese company Landbridge raised concerns about national security.

 

What sets this case apart from the others is the fact that the 190 year old property - has never had Australian owners.

 

The current owner is a New Zealand base company.

 

Jim Harrowell says Australia should be encouraging foreign investment - particularly from China - not discouraging it.

 

"We’ve got to continue to grow and seek out new markets and if Australia doesn't fill those markets, China will outsource that product from other places,"  Harrowell said.

 

The sale of the Van Diemen's Land Company is expected to be finalised later this year.