Investment into WA dairies welcomed

Investment into WA dairies welcomed

Agribusiness
WAFarmers dairy section president Mike Partridge said the local industry needs investment and he was hopeful the new deal announced this week would provide that.

WAFarmers dairy section president Mike Partridge said the local industry needs investment and he was hopeful the new deal announced this week would provide that.

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"IT's better sold than not," was the reaction of WAFarmers dairy section president Mike Partridge to the proposed sale of Lion Dairy and Drinks (LDD) to China Mengniu Dairy Company Ltd.

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"IT's better sold than not," was the reaction of WAFarmers dairy section president Mike Partridge to the proposed sale of Lion Dairy and Drinks (LDD) to China Mengniu Dairy Company Ltd.

"(LDD) has been for sale for almost two years and that has caused uncertainty in the industry generally," said Mr Partridge, one of LDD's 28 Western Australian dairy farm suppliers.

"The company that is buying it has talked about growth and export and expanding into new markets.

"WA's dairy industry certainly needs that sort of investment in it and in growth so we hope that comes about," he said.

Since it was acquired in November, 2017, another of WA's milk processors Brownes Dairy has flourished under ownership of a Chinese dairy company, Shanghai Ground Food Tech.

It has reopened its Brunswick cheese plant that was shut down under a previous Sydney-based private equity investor owner, introduced new technology and innovative packaging and begun a push into Eastern States' markets with WA premium chilled coffee and yoghurt products.

Its business strategy has been relatively conservative - protect Brownes' position as the biggest milk processor in WA, cautiously expand into other Australian markets and then move on to export to China and South-East Asia.

While not providing its milk suppliers with everything they wanted, Brownes has also introduced a new pricing structure with significant price incentives for milk supplied over summer and more flexible contract arrangements.

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