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China's wealth fund eyes New Plymouth-owned Tasmanian dairy farms

Tuesday 25th September 2012

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China Investment Corp, the US$200 billion sovereign wealth fund, is in talks to invest in Van Diemen's Land Co as the New Plymouth District Council-owned dairy farmer seeks to raise up to A$180 million to ramp up production.

A tie-up with the Chinese fund would come after Tasmanian Premier Lara Giddings returned from a trade mission that included pitching agriculture and mining investment opportunities to China Investment Corp.

New Plymouth council-owned Tasman Farms, which was delisted from the Unlisted platform in 2010, wants to raise at least A$100 million in fresh equity for Van Diemen's Land to lift production, chief executive Mike Trousselot told BusinessDesk.

"We want to be one of the long-term players with global demand for food," Trousselot said.The farm operator wants to grow its milk production capability to as much as 15 million to 18 million kilograms of milk solids from 5.76 million kg in the 2012 season.

It is already Australia's biggest dairy farmer and Fonterra Cooperative Group's largest supplier on the other side of the Tasman, Trousselot says. Van Diemen's Land chief executive Michael Guerin said in a statement he was confident the expansion plans would raise enough funds with "a number of investors interested in the project."

Two China Investment Corp executives spent two days visiting Van Diemen's Woolnorth farm, Australia's biggest dairy farm, having already inspected the rival Little Lion dairy operation in Tasmania, Fairfax Media reported.

The sovereign wealth fund has approached the Foreign Investment Review Board for preliminary consultations, reports said.

Foreign ownership of land, particularly involving Chinese buyers, has been a thorny issue on both sides of the Tasman with Shanghai Pengxin's purchase of the Crafar family farms in New Zealand set to face a challenge in the Supreme Court, while Australian approval for Shandong Ruyi to buy Queensland cotton farm Cubbie Station attracted heavy criticism from Opposition politicians.

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