Chinese businessman Lu Xianfeng is behind the bid for dairy company Van Diemen's Land Company in Australia.
Chinese VDL buyer visits the 20,000 hectare property in north-west Tasmania
By Sallese Gibson
The prospective buyer of the Van Diemen's Land (VDL) Company dairy farm in Tasmania's north-west has visited the 20,000 hectare property.
Chinese businessman Lu Xianfeng said he wants to increase production, to meet a booming Chinese demand.
His company Moon Lake Investments has made a $280 million binding offer to buy the dairy company.
The business, which is currently New Zealand-owned, includes 20,000 hectares of land and 80,000 cows.
Mr Lu toured the property in the north-west, for the first time since signing the sales agreement.
He said he is excited at the prospect for future growth.
"We are very, very impressed with VDL operations... and the management... and what they've done to date," he said.
"We see the potential in these great assets and we will unlock that potential, together with the management.
There is a gap in product offering in China to the rising affluent and we'd like to fill that market demand with high and premium product from Tasmania.
Moon Lake Investments owner Lu Xianfeng
"Our plan is to work with the management and the board and to work out a business case, requiring any capital expenditure that we need to invest."
Mr Lu did not detail the expansion plans but said he hoped to tap into the booming Chinese market.
"There is a segment of the Chinese market that has been unfilled," he said.
"There is a gap in product offering in China to the rising affluent and we'd like to fill that market demand with high and premium product from Tasmania.
"Our objective is not to just increase the production but to also increase the quality and to package it as a premium product."
Mr Lu is confident its plans to expand the company will have flow-on effects for other Tasmanian businesses.
"Tasmanian producers are sustainably grown, they are clean, they are fresh, so if we package it well and market it well to the customer segment in China... I think it would be a really good decision," he said.
"[The] vision goes well beyond VDL in that we would like to be a trade bridge for all Tasmanian businesses and products to be able to tap into China's international market."
Legal action not a concern for new owners
The sale is still subject to approval from the Foreign Investment Review Board, which Mr Lu expects will be finalised by the end of January.
VDL CEO David Beca shows buyer Lu Xianfeng, centre, and Sean Shwe
PHOTO: VDL CEO David Beca shows buyer Lu Xianfeng, centre, and Sean Shwe around the Woolnorth property. (ABC News: Lauren Waldhuter)
Mr Lu said that transaction was the company's priority at this stage.
"Our current plan is to just complete the VDL sale and do all the things that we'd like to do and unlock that potential with VDL properties," he said.
Australian company TasFoods is currently challenging the decision to sell VDL to Moon Lake Investments in the Supreme Court in Melbourne.
It accused VDL's current owners of reneging on a $250 million sales contract it signed, before Mr Lu made his offer.
A temporary injunction on the sale is in place until the next court hearing on Friday.
But Mr Lu said he did not believe it was slowing the sales process.
"We are getting on with things that we need to do to complete the deal," he said.
"We are not a party to the legal case."
Future plans 'exciting' for north-west region
VDL chief executive David Beca was enthusiastic about the potential benefits of the proposed sale.
"We're looking forward hugely to the company being purchased and the opportunities that we see it's going to bring," he said.
"We continue to see terrific opportunities for the business here.
Aerial view of the Van Diemen's Land Company, Tasmania
PHOTO: The new sales agreement for the VDL business in north-west Tasmania is still subject to a temporary court injuncion. (Supplied: Van Diemen's Land Company)
"We know that Mr Lu can see also some huge opportunities for this business, both at the farmgates and outside the farmgates.
"We're very excited about having a shareholder who is very keen to invest in the existing business and grow the business.
"For the staff, that's terribly exciting and it will require more staff, which is great for the local community."
The State Government has approved plans to extend VDL farms onto existing, state-owned scrubland.
But Mr Beca said he did not expect the new owner would do that in the near future.
"The discussions so far have been on the basis that we see lots of opportunity to expand the existing operation without having to look at that at this stage," he said.
"The opportunities in the present grassed area of the property, areas such as irrigation, there's a whole range.
"There's many opportunities within the business that we see as greater opportunities actually, without actually having to consider if that's pursued at the moment."
