Discover why China’s wealthiest mogul is set to sell his Tasmanian dairies following a botched deal with Fonterra. What led to this decision? Find out here.
Chinese billionaire Xianfeng Lu has put the Woolnorth Farming Aggregation in Tasmania, one of the country’s largest dairy operations, up for sale. This surprised move comes after a significant milk supply contract with dairy giant Fonterra soured earlier this year. Back in 2016, the businessman paid a whopping $280 million to acquire the Van Diemen’s Land Company and its dairy farms situated at Circular Head on the northwestern apex of the island.
At the time of purchase from New Zealand’s Tasman Agriculture, VDL proudly stood as the largest single supplier of milk in Australia, boasting nearly 18,000 cows and producing roughly 7.66 million kilograms of milk solids. Sadly, in February this year, Fonterra had to cancel a 25-million-litre milk contract with Van Dairy. The reason given for this cancellation was “unresolvable commercial factors.” Post this, Van Dairy had no other choice but to send 700 cows for slaughter.
With disappointment, Mr. Lu announced that he was placing Van Dairy’s remaining land holdings on the market “in anticipation of the expiration of our long-term milk supply agreement.”
The listing of Woolnorth includes a vast area of 9500 hectares of farmland, constituting 4207 hectares of dairy region. Most of the downsizing occurred last year when Van Dairy sold 11 dairy farms, accounting for around 2200 hectares, and 5000 cows for $62.5 million to Melbourne-based fund manager Prime Value. It’s essential to note that Woolnorth’s historical roots trace back almost 200 years.
The task of selling the remainder of Woolnorth is presently undertaking by Tony Maguire and Brad Davies from Nutrien Harcourts. According to the 2023 Australian Farmland Values Report by the Rural Bank, it reveals that the median price of a hectare of farmland in Northwest Tasmania was just under $26,000 in 2022.
On another note, Prime Dairy’s recent 700-hectare acquisition last month was agreed upon at $21,400 per hectare, but this price included livestock. Lastly, the Woolnorth offering boasts extensive water entitlement (over 10,300 megalitres) and extensive infrastructure, including:
- A homestead block with seven homes and a director’s lodge
- Eight rotary dairies
- A substantial workers’ accommodation block
- Numerous outbuildings and sheds
Summary: Chinese billionaire Xianfeng Lu has put the Woolnorth Farming Aggregation in Tasmania, one of the country’s largest dairy operations, up for sale after a botched deal with Fonterra. In 2016, Lu paid $280 million to acquire Van Diemen’s Land Company and its dairy farms in Circular Head, Australia. VDL was the largest single supplier of milk in Australia, with nearly 18,000 cows and 7.66 million kilograms of milk solids. In February, Fonterra had to cancel a 25-million-litre milk contract with Van Dairy due to “unresolvable commercial factors.” Lu announced that he was placing Van Dairy’s remaining land holdings on the market in anticipation of the expiration of their long-term milk supply agreement. Woolnorth includes 9500 hectares of farmland, constituting 4207 hectares of dairy region. The task of selling the remainder of Woolnorth is currently undertaken by Tony Maguire and Brad Davies from Nutrien Harcourts. The median price of a hectare of farmland in Northwest Tasmania was just under $26,000 in 2022. Prime Dairy’s recent 700-hectare acquisition was agreed upon at $21,400 per hectare, but this price included livestock. The Woolnorth offering boasts extensive water entitlement and extensive infrastructure, including a homestead block with seven homes and a director’s lodge, eight rotary dairies, a workers’ accommodation block, and numerous outbuildings and sheds.
