Mining and construction magnate Bill McDonald will build a 40,000-strong dairy herd in south-west Victoria and is on the hunt for 250 million litres of milk from existing farmers, to complement his own production.
Camperdown Dairy International already owns an operational milk powder plant in Melbourne and has control of a second factory in Camperdown, which will undergo a $200 million transformation.
Mr McDonald said he had secured 20-year contracts with dairy buyers in Asia, the Middle East and the United States, adding there was potential to expand the business further in due course.
«What we’ll have is the first dairy business in Australia that’s fully integrated,» he said.
«The only thing we outsource is diesel, fertiliser and wages – we grow our own crops, do our own breeding, milk the cow, transport the milk, process it and put it in a tin.
«It’s 2015 now. The consumer wants traceability of what they consume.»
The 42-year-old, who was ninth on the Young Rich List in 2012 and is now valued at more than $150 million, said he was also planning large investment in the red meat industry.
This week Mr McDonald finalised the takeover of a 7,500 acre property in Frances, on the SA-Victorian border, where he has received approval to build a $40 million dairy operation.
He expects to have five other properties in his name within months.
«We’ve now planted the whole [Frances] property in crops, ranging from lucerne to canola, wheat and barley,» he said.
«We’ll be producing 100,000 tonnes of powder per annum, so if someone comes and orders more, we ring our farm managers and tell them to go and get two more farms.
«The site at Camperdown is large enough that we can put more [milk] driers there, or cheese plants, or yoghurt or whatever we require.»
Mr McDonald committed to employing more than 200 people, citing the need for 80 farm staff and at least 150 factory workers.
«We’ll source them locally,» he said.
«If you offer long-term employment and stability, people will come.»
The company is now looking to negotiate deals with dairy farmers across southern Australia.
«We’ll be offering long term contracts, so that then allows the farmer at the end to invest,» Mr McDonald said.
«We don’t care where [the milk] comes from, as long as it doesn’t cost us any more than five cents a litre to go and collect it.»
Mr McDonald’s own cows will be milked three times a day and housed in huge sheds, a set up that he said was about animal welfare and optimum production.
The animals’ ability to roam in open paddocks will depend on seasonal conditions.
«It will depend on the temperature, the wind, the wellbeing of the cow, depends on if the cow’s just calved, if it’s at the end of its cycle, all those things come into consideration,» he said.
«Each cow is individually monitored with a computer system.
«Those cows will be producing 10,000 litres per annum each, minimum; if they don’t, they get removed from the herd.»
Artificial insemination programs will be started as soon as possible, with genetics being shipped from the United States; the plan is to build a herd to 40,000 cows within two years.
Mr McDonald said milking at the Frances farm should be underway before the end of the year, to be processed at the Melbourne factory.
The Camperdown milk driers will not be operational until mid 2016.
Mr McDonald roots lie in agriculture, in south west Victoria, where his family grew potatoes, sheep and cattle.
«In 2004 I went into mining and in 2008/09 we started doing our own exploration and went into our coal mine leases,» he said.
«In 2012 we sold most of that we sold most of that, when the market was at the peak and then got into property development.
«This is our first agricultural one we’re doing and we’re starting to plan our second one, which is to do with red meat.»
So why dairy?
«Money,» he said.
«Pretty simple; we think there’s a huge potential there and there’s a hole in the market.»
Mr McDonald owns the MCG Group, a contracting and quarry business operating in the Queensland coal industry. It has developed rock quarries, dams, roads, railways, tunnels and airstrips for the resource industry.
SA Dairyfarmers Association welcomes announcement
SA Dairyfarmers Association president David Basham said it was great to see investment in the industry.
«This follows the commitment by Midfield earlier in the year. There’s a lot of potential in this region, the south-east of South Australia, for development and this is a great example,» he said.
Mr Basham said farmers and the banks would welcome Camperdown’s offer of long term contracts, something producers had not had previously.
«I hope it introduces a bit more stability on our pricing from year-to-year, that’s the thing farmers find the hardest, going from a boom to a bust and managing those changes.»
Source: ABC
