Moon Lake Investments opening new ‘trade bridge’ to China for fresh Tasmanian produce

TASMANIAN milk from Australia’s largest dairy farm and processed at Lenah Valley could be in China the next day, fetching between $10 and $15 a litre on Asian supermarket shelves.

TASMANIAN milk from Australia’s largest dairy farm and processed at Lenah Valley could be in China the next day, fetching between $10 and $15 a litre on Asian supermarket shelves.

Van Diemen’s Land (VDL) company’s Chinese owner yesterday announced landmark plans to underwrite freight flights from Hobart, to get its new fresh milk product to market — the state’s first regular international air-freight route into Asia.

“This is a really exciting opportunity using our logistics and ability to take Tasmania to the world. It’s a neat fit,” Premier Will Hodgman said.

“We couldn’t imagine this just a few years ago.”

The move also opens up significant opportunities for all Tasmanian producers of fresh, perishable produce — such as seafood, fruit and vegetables — to expand the trade link between Hobart and Ningbo, a large port city near Shanghai.

Van Milk, sister company of VDL’s owner Moon Lake Investments, which has 25 dairy farms in Tasmania’s North-West, has launched the VAN Milk brand as part of the deal.

This will be distributed as a premium-priced fresh product to Ningbo and Beijing in the first quarter of next year, with a view to increasing the frequency of flights to two to three a week within a year.

During the initial stages, the company plans to process about 10 million litres — about 10 per cent of its annual production — under contract by Lion Dairy at Lenah Valley and branded VAN Milk for the Chinese market.

VDL plans future products, including yoghurt and possibly milk powder and baby formula, with the balance of its milk still to be processed by Fonterra.

Moon Lake Investments managing director Sean Shwe said the venture was a game changer for the local industry.

“This is an exciting venture for our company, VDL Farms and potentially for all Tasmanian producers of fresh, perishable produce, from milk to seafood, fruit and vegetables,” Mr Shwe said.

“It could open up opportunities for other local dairy farms producing premium milk.”

Moon Lake Investments managing director Sean Shwe at Hobart Airport. Picture: SAM ROSEWARNE.

Tasmanian Farmers and Graziers Association Dairy Council chairman Andrew Lester said the move could open doors for increased exports of high value products in the future.

“It will reinforce the importance of our dairy industry, and the Tasmanian brand in general, to key international export markets,’’ Mr Lester said.

“The move could also free up a certain amount of processing capability for other dairy farmers within the state. This is a much needed positive sign for our industry.”

Executive officer Mark Smith of DairyTas, the service body for the state’s dairy industry, lauded the initiative.

“It’s good, especially for the local dairy industry and using the Tasmanian brand — too much of our local produce goes into non-branded products,” Mr Smith said.

Circular Head Mayor Daryl Quilliam said it was the most significant thing to happen to the dairy industry “since I was working on a farm in 1960”.

Mr Hodgman said Tasmania was front and centre for investors wanting to take advantage of the opportunities on offer. The State Government said Co-ordinator General John Perry, who was criticised in State Parliament after details of his salary of $446,000 was published in the Department of State Growth annual report, had been instrumental in developing the deal.

Moon Lake has engaged two freight companies, with Tasmanian family-owned SRT Logistics to move the milk from the Lenah Valley plant to the airport and national firm Link Logistics to control the milk transportation to China.

During the initial stages, the company plans to process about 10 million litres — about 10 per cent of its annual production — under contract by Lion Dairy at Lenah Valley and branded VAN Milk for the Chinese market.

The deal also can start before the expansion of the Hobart International Airport runway, due in early 2018.

Link Logistics managing director Chris Fox said a Boeing 747 cargo jet weighing between 85 to 110 tonnes could land at Hobart.

“However, it would need refuelling at an interstate airport before continuing its journey to China,” Mr Fox said.

“The key thing is the produce is not moved and remains on the plane until it lands at its final destination.”

The runway extension would allow for non-stop flights.

SRT Logistics chief operating officer Brad Hilder said his company has been involved in moving fresh produce for 30 years throughout Tasmania and across Bass Strait.

Mr Shwe said Moon Lake planned to expand dairy operations, upgrade quality controls and create more jobs in the state’s North-West.

“We will have a chain of custody to ensure a high quality system is in place, which is important to Chinese consumers, especially traceability of product from the cow to the carton,” Mr Shwe said.

“It’s a vital part of the marketing strategy that VAN Milk attains status as high value product in China.”

The Lion Dairy plant is the only Tasmanian licensed export pasteurised milk processor with the capacity that Moon Lake requires.

Ningbo is the home town of Moon Lake Investments’ owner, billionaire Lu Xianfeng.

“Also the city has among the highest average incomes in China and is less saturated with western products than, for example, Shanghai,” Mr Shwe said.

Lu Xianfeng, the sole owner of Moon Lake Investments, out in the field.