Tasmania's North-West is attracting buyers from outside the state - even outside the country. (Photo: Scott Gelston)
Laguna Bay Pastoral Company buys eight Smithton dairies
by Johanna Baker-Dowdell
The North-West’s rolling green hills, fertile soil and good rainfall has long attracted Tasmanian farmers, but the region has admirers from further afield too.
Queensland-based agricultural funds manager Laguna Bay Pastoral Company has recently bought eight dairy farms in the Smithton area.
Laguna Bay is a privately-owned fund manager that acts for North American pension funds.
It invests in agricultural operations in Australia and New Zealand, chief executive Tim McGavin said.
“We specialise in joint ventures in farmland ownership, like mixed cropping and livestock,” he said.
The farms, which are located between Smithton and Edith Creek, are milking around 6500 cows between them, and Laguna Bay plans to build this up to 10,000 within the next 18 months.
Expanded milk volume provides further opportunity for employment in the North-West.
Smithton farmers Ashley and Cherrylyn Ker are overseeing Laguna Bay’s Tasmanian dairy operation, with farming families already in place at all dairies.
“This is a really good example of how having the right structure with capital creates great results,” Mr McGavin said.
“There are share farmers on all the dairies. We provide them with the best practical governance and it’s great for the local community.”
While the North-West dairies are Laguna Bay’s only Tasmanian acquisition at the moment, Mr McGavin said the business had not ruled out further investment in the state.
“We have nothing else in Tasmania, but we have a very broad mandate to invest in anything in agriculture,” he said.
“It’s a good time to enter Tasmania’s East Coast and North-West. Tasmania has the lowest cost production areas in the Southern Hemisphere.”
The agribusiness also has a sizeable almond operation in Victoria, showing agricultural diversity.
“We want to partner with good operators. We look at opportunities above $30 million,” Mr McGavin said.
While the business specialises in joint ventures, other non-traditional strategies are considered for acquisitions, such as leaseback arrangements, he said.
Laguna Bay is not looking to make money quickly, but is “very patient” for the right opportunities, as agriculture is a “passion”, Mr McGavin said.
Unlike fellow international dairy investor Moon Lake, Laguna Bay is not planning to go down the organic dairy route, but Mr McGavin did not rule it out completely.
“We would do it if it economically paid for the risk.”
