Ningbo Dairy Group leaves Kernot dairy farm in derelict state

THE idea was lauded, but the reality of the Ningbo dairy plan is a mess no one wants to own, writes PETER HEMPHILL.

Rack and ruin: Australian Yoyou Dairy director Harry Wang, pictured in 2015 on one of the Kernot dairy farms.

IT WAS proposed as a model dairy investment by big spending Chinese owners amid great fanfare.

But seven years later, the Ningbo Dairy Group’s project to produce and process milk on five South Gippsland farms to fly bottled fresh milk to China lies in rack and ruin.

At least two of the farms at Kernot have become a breeding ground for thistles, cattle regularly stray from the property and the company spent five months in liquidation last year because it would not pay its bills to local businesses.

Ningbo Dairy Group, through Chinese subsidiary Zhejiang Nanyuan Holding Group, set up Australian Yoyou Dairy Pty Ltd in November, 2012 to buy and run the five Gippsland dairy farms.

Ningbo Dairy Group majority owner director Yinchong Zhang became a director of Australian Yoyou Dairy. His nephew, Harry Wang, was another director and front man for the company in Australia.

Ningbo Dairy runs about 20,000 dairy cows on 30 farms in the Zhejiang province south of Shanghai.

The company bought three dairy farms in the Tenby Point area near Corinella and two adjacent farms at Kernot.

The two Kernot properties, which included 520 milking cows, were sold by David and Marie Trigg in late 2012 on a walk-in, walkout basis.

The new Chinese owners planned to double the size of the Kernot herd, raising 1000 milking cows in barns.

In late 2014, they applied to the Bass Coast Shire Council to develop a $6 million dairy processing and bottling plant to export fresh milk to China through Tullamarine Airport.

Ningbo Dairy Group vice-president Harry Wang told The Australian in September, 2014, the key to the investment “lay in vertically integrating the group’s Australian operations with it owning and controlling all parts of the supply chain”.

Mr Wang told the 2015 Global Food Forum Ningbo Dairy Group planned to spend $15 million in the region to pursue its dairy dream. But with a massive opposition to the new dairy proposal, Bass Coast Shire Council knocked back the development plans on a range of grounds, including environmental, scale of the operation and local roads being able to handle heavy trucks.

Ningbo sold most of the dairy cows and the Kernot farms have deteriorated, according to local farmers.

The farmers say thistles have become out of control and unsold cows died in paddocks at the rear of the properties.

“There have been cattle that kicked the bucket, which probably shouldn’t have kicked the bucket over the course of time,” said a source, who did not wish to be named.

The Kernot farms have now been stocked with cattle for a Wagyu embryo transfer program. Mrs Trigg claimed the cattle regularly strayed on to local roads and the Bass Coast Shire Council had fined Yoyou Dairy.

Bass Coast Shire’s Allison Jones said council officers had investigated several complaints about the Yoyou Dairy farms, mainly about livestock escaping through inadequate fencing.

“We’re unable to provide information on infringement notices or fines issued to specific properties, as this may jeopardise our future legal options,” Ms Jones said.

Sources also told The Weekly Times the Chinese company failed to pay its bills, owing a number of contractors money for work upgrading equipment on the dairy farm.

Last March, Warragul milking equipment company Eli Innovation placed Australian YoYou Dairy into liquidation after the Chinese company ignored repeated requests to pay for the installation of automatic cup removers in its milking plant.

According to the liquidators’ report, Australian YoYou Dairy “disputed the quality and completeness of the works” and refused to pay Eli Innovation’s bill.

But Eli Innovation managing director Greg Cole said the Chinese company had a habit of claiming “it was always somebody else’s fault”.

“They ignored our letters (of demand) so we put them in liquidation,” Mr Cole said.

“Then they frantically tried to stop the liquidation.”

Australian YoYou Dairy paid its way out of liquidation last June and its ownership changed to being a direct subsidiary of Ningbo Dairy Holdings.

Mr Cole said his company had since been paid, although much less than what it was owed.

Mr Trigg claimed a number of creditors did not know Australian Yoyou Dairy had been placed in liquidation. He claimed many creditors wrote off money owed by YoYou as bad debts.

Mrs Trigg said Australian YoYou Dairy still owed them about $4000. She claimed it also owed $13,000 to its electricity supplier, Australian Energy, because the bills continued to be sent to her.

Mr Wang did not reply to The Weekly Times and Australian Yoyou Dairy’s representative in Australia, Kevin Harrison, of Moorabbin accountancy firm Douglas Harrison, also did not respond.