VDL Farms continues plans to export fresh milk to China despite chief executive resignation

ABC Rural 

By Margot Kelly

Posted Mon January 30th 2017

PHOTO: David Beca (L) says his role has changed since Moon Lake Investments took over. (ABC News: Lauren Waldhuter)

MAP: Woolnorth 7330

Australia's largest and oldest dairy will continue with plans to export fresh milk to China despite the resignation of its chief executive.

Outgoing chief executive David Beca has been at the helm of VDL Farms since July 2015, but announced this month he would be resigning from the role.

VDL Farms was bought by Chinese-owned Moon Lake Investments in early 2016.

The new owners have since launched plans to export branded fresh milk from Hobart to China on direct weekly flights.

Mr Beca told ABC Rural that despite a backdrop of failed plans to capitalise on the emerging middle class market in China, he was confident China presented significant opportunities for Australian dairy businesses.

"China clearly presents risks if your business is completely reliant on a niche product into China because, like many other markets, rules and regulations can change," he said.

"I think all it means is one might be wise not to bet the bank on everything going smoothly from day one, and I know we certainly won't be.

"Our initial move there is in a general product, not a specialised product. Just very high quality milk."

Resignation not linked with China plans

Mr Beca said his resignation was independent of the changes underway in the Chinese market that have caused significant disruption to other Australian dairy companies such as Bellamy's, Murray Goulburn, and Bega and Blackmores.

"It's a personal decision and related to a change of role," he said.

Mr Beca said his role had changed from a primary leadership role to more of a chief operating officer role when the business was acquired by Moon Lake Investments.

"When Moon Lake took over a significant part of that role was taken up by the Moon Lake managing director Sean Shwe, and it means my role has changed," he said.

Room to grow

Mr Beca said VDL Farms could double production without increasing land.

"There's room within our existing farms to continue to grow milk supply just through how we manage pasture and if we have opportunities to add water to irrigate," he said.

"We could comfortably add 9,000 cows to our dairy herd."

The acquisition of VDL Farms by Moon Lake Investments came with the promise of guaranteeing more than 140 local jobs, generating an intended additional investment of more than $100 million and an expected 95 additional jobs.

"I'm sure having Moon Lake on board makes a difference too when it comes to exporting to China. [China is] a complex and at times a not very transparent market," Mr Beca said.

"I think it's fair to say we've got to be more confident than most, but clearly it's still ahead of us."