Since 2008 Parmalat Australia, a subsidiary of French giant Lactalis, has almost doubled its revenue to about $1.3 billion and in the past year it has spent more than $200 million on local capital projects and acquisitions.

«We are putting capital into assets we think can add value long term around exports,» Mr Garvin said.

The Parmalat boss said the access gained in the three free-trade deals was important because of their intent rather than the specifics of reduced tariffs or quotas.

«It is not so much the detail. I think it is more the symbolic coming together of countries saying we want to trade long term,» he said.

«Long-term free-trade agreements are really important, because behind that you can develop a capital investment plan over a 10-year horizon.»

In the days before Christmas Parmalat agreed, subject to Foreign Investment Review Board approval, to acquire Victorian dairy exporter Longwarry Food Park for $70 million.

Parmalat is predominantly a domestic player, facing tight margins because of competition and the power of supermarkets Coles and Woolworths.

The Longwarry deal further bolsters Parmalat’s export capability into Asia, following the $120 million acquisition of Western Australia’s biggest dairy exporter Harvey Fresh in April. With the acquisitions Parmalat will have revenue of about $1.5 billion.

More than 80 per cent of its business is domestic but the export side of the operation is growing the fastest.

Parmalat owns brands including Pauls, Oak flavoured milk, Vaalia yoghurt and Ice Break iced coffee.

Pauls is the No 1 UHT (long life milk) brand in Hong Kong and Mr Garvin sees big growth potential in Asia from its export bases in Perth and Melbourne.

«We are open to acquisitions if they make sense. The moves we’ve made show that we have a very strong intent to be an export player out of Australia and that we will invest,» he said.

Australia’s annual production has been stagnant at about 10 billion litres of milk a year for the past decade, while rival New Zealand has roughly doubled production to about 20 billion litres.

There are a number reasons for the difference, including drought. But Mr Garvin said there was no reason Australia could not be a 20-billion-litre milk nation.

«To do that we need profitable exports. The FTAs mean that over the long term farmers can see good news [to invest],» he said.

There are six large processors competing for milk in Australia and Mr Garvin said there would be more consolidation in dairy.

«There needs to be consolidation. Who, what and where I don’t know, but the way it is now is unsustainable,» he said.

There has been a long debate over whether Australia should follow New Zealand and create a regulated monopoly like Fonterra. Proponents say this would provide scale and make Australia more globally competitive.

Mr Garvin said that was the wrong debate to be having.

«It’s not about monopolies and government regulation. It is about having a well-respected source of product that is valued in Asia, and how we set up smart export businesses that are cost efficient and value-add brands on top,» he said.

Australia’s industry fragmentation has led to fierce competition and excess capacity in factories. This has weighed on returns already pressured by $1 a litre milk and cut-price retail strategies.

Australia’s biggest dairy group, Victorian co-operative Murray Goulburn, has just invested $120 million to build two new plants for its 10-year, $2 billion private label milk deal with Coles.

Mr Garvin said private label was important to offset fixed costs, but he questioned the logic of the investment.

«The last thing Australia needs is more white-milk plants,» he said.

«The domestic industry is a challenging market, with high milk costs and intense competition on the shelf. That can equal low margins. Everyone is scrambling for limited shelf space.»