Thursday, March 23, 2017

Tasmania buy-up: China on investment spree

Tasmania buy-up: China on investment spree

Tasmanian orchardist Howard Hansen with workers. Picture: Peter Mathew
Tasmanian orchardist Howard Hansen with workers. Picture: Peter Mathew
Howard Hansen shows off his Sweetheart cherries, which will be harvested in February. Picture: Peter Mathew
Howard Hansen shows off his Sweetheart cherries, which will be harvested in February. Picture: Peter Mathew
AUSTRALIA’S smallest state is set to reap the benefits of a multi-billion-dollar landslide of Chinese investment in its agricultural sector, under deals to be sealed when Chinese President Xi Jinping flies to Hobart next week.
It is understood that at least four major investment agreements will be signed and announced while Mr Xi is in Tasmania for a five-hour visit on Tuesday, including a special deal between the state government and a major Chinese investment bank to inject much-needed funds into the state’s expanding dairy, fruit and aquaculture industries.
Deputy Premier and Agriculture Minister Jeremy Rockliff said last night that deals were imminent and Chinese investors wanted to buy “investor-ready” land and water farm packages.
He said the Chinese investment funds from state-owned companies and banks would be used to convert and develop lower-value sheep and cattle farms into more intensive dairy farms, with irrigation infrastructure and by building new dairies.
“Negotiations are still being worked through but we have water and land for sale, we encourage Chinese investment and we need to increase our milk production from 800 million litres to two billion litres in just a few years,” Mr Rockliff said.
The Tasmanian fruit industry will also be the beneficiary of Mr Xi’s visit to the Apple Isle, with the expected signing of a landmark memorandum of understanding for a China-Tasmania fruit industry partnership program.
Tasmania will more than double its horticultural production over the next five years. The remarkable growth — to meet the burgeoning out-of-season demand from China, Taiwan and other Asian countries — has been driven by individuals such as fourth-generation Tasmanian orch­ardist Howard Hansen, who has pioneered access to Chinese markets for cherries and apples over the past two years.
“Hansen orchards planted more trees this last winter — 25,000 apple trees or about 8 ha of land — than at any time in the past,” Mr Hansen said.
His rapid expansion has allowed him to supply 50 per cent of all Tasmanian cherry exports to China from his Huon Valley orchard at Gove.
Exporters such as Mr Hansen use air freight to get their produce to Chinese tables within days, providing an edge over their main competitor, Chile.
However, currently, all exported fresh foods such as fruit and seafood have to be flown via Melbourne or Brisbane airports because Hobart’s runway is too short for international access.
“It’s expensive but it allows us to get our cherries to market less than 48 hours after they are picked from the trees, compared to the Chilean product, which is closer to 48 days sent by sea,” Mr Hansen said. “Are the Chinese going to pay a premium for that fresh product?
“That’s the million-dollar question, but the past 18 months (of exports) have been encouraging.”
Tasmania is well regarded in China and Taiwan, gaining access to markets denied to mainland growers because of its disease-free status and prized branding.
The Weekend Australian understands that other deals to be announced may include the part sale of Tasmania’s biggest dairy farming business, the Van Diemen’s Land company, to state-owned Chinese interests, along with a package of 20-30 other northwestern dairy farms.
The new Chinese investor in NZ-owned VDL, which owns 28 dairy farms and milks 30,000 cows, is also apparently keen to build wind turbines on VDL’s massive Woolnorth property on Tasmania’s northwest tip to meet China’s increased clean energy commitments.
There are already two wind farms on Woolnorth on land compulsorily acquired by the Tasman­ian government from VDL in 2000, near Cape Grim and facing the Roaring 40s .
The 37 wind turbines at Bluff Point and 25 towers at Studland Bay are now 75 per cent-owned by China’s Shenhua Clean Energy Holding Pty Ltd, itself majority owned by the government’s Guohua Energy Investment company, after Hydro Tasmania sold its ownership down in 2012 for $88.6 million.
VDL managing director Trevor Westacott denied there would be any announcement on Tuesday concerning the imminent sale of all or part of VDL, linked to the Chinese President’s visit.
The use of an extended Hobart airport runway and Hobart Port as a new base for Chinese ships serving China’s Antarctic base is also expected to be announced.
Direct international flights between China and Tasmania bringing Chinese tourists into Hobart and flying fresh produce out are also in the wind, once the federal government-funded upgrade of the runway is completed.
Mr Rockliff said it was also possible a new trade in fresh milk from Tasmania to China, flown out of Hobart airport, would begin, to take advantage of the astounding $10-a-litre prices for fresh Australian milk being paid by wealthy Chinese in Beijing and Shanghai.
About 17 per cent of Tasmania’s agricultural and seafood exports — which include meat, abalone, oysters, crayfish, dairy, fruit, berries, nuts and vegetables — were sold last year to China, with it fast overtaking Japan as the largest buyer of Tasmania’s “clean, green” agricultural produce.