MURRAY Goulburn managing director Gary Helou says the Australian dairy industry should brace for a wave of consolidation among processors in anticipation of an Asian export boom.
«There are nine processors in this market, and the majority of them are focused on the domestic market, which is heavily dominate by retail power,» Mr Helou told Financial Review Sunday on Channel Nine.
«I’m on the record saying that in the next few years, the number of processors will halve and that, in my opinion, is an inevitable revelation.»
MG, which markets its product under the Devondale brand, is the nation’s biggest dairy exporter, collecting and processing one-third of Australia’s nine billion-litre milk pool from its 2500 farmer-shareholders.
Mr Helou said he had moved on from the fierce $500 million takeover battle for Victoria’s Warrnambool Cheese & Butter which was bought by Canadian giant Saputo, and is focused on paying farmers a better milk price.
«That is the stimulant for farmers to invest in their own farms and drive production,» he said.
«Australia should be producing more than nine to 10 billion litres of milk. We should be producing 15 billion to 20 billion litres.»
Processors such as Saputo and Murray Goulburn want that extra milk to turn into milk powders, infant formulas, cheeses and other products to feed Asia’s growing appetite for dairy foods.
Mr Helou said China «will define dairy foods globally for the next 10 to 20 years».
«It is going to be dependent on imports and Australia has a real role to play. It could be very prosperous.»
Parmalat Australia, the nation’s fifth-biggest processor and a wholly owned subsidiary of French behemoth Lactalis, also has its eye firmly on Asia.
Chief executive Craig Garvin said Australia’s reputation as a clean and green producer meant Australian product was highly prized in Asia.
Source: The Australian Dairy Farmer
