CAMPERDOWN Dairy International (CDI) has bought the first of about six farms it needs to supply the proposed large-scale whole milk powder and infant formula factory in Camperdown.
CDI director Bill McDonald scotched rumours the project had hit a hiatus.
He said the company was working hard to create a new supply line of milk for the factory to supplement the milk it aimed to attract from existing south-west producers.
Mr McDonald said the company had bought a 3035-hectare irrigated cropping farm at Edenhope in western Victoria on which it planned to run 3600 cows and produce 40 million litres of milk.
He said CDI was also in negotiations to buy another five farms but declined to say where those farms were located.
Mr McDonald said CDI’s plan to eventually create its own 320-million-litre milk supply for the Camperdown factory meant it was spending every effort to get dairies approved on properties that were new to the industry.
“That is why it is taking so long,” he said.
“We are putting the cow where the feed is and carting the milk back.
“We are taking Mohammed to the mountain,” Mr McDonald said.
“We have a team of people working seven days a week.”
Mr McDonald said the company had also spent a lot of time in the past eight months preselling its product before starting construction on the plant.
About 60 per cent of the plant’s production had been presold and about 40 per cent of the production will go to the Middle East and the United States.
About 40 per cent of the presold production had been sold on a 20-year term contract, giving the project’s bankers considerable comfort, Mr McDonald said.
He said the factory would produce 60,000 tonnes of infant formula and 40,000 tonnes of whole milk powder.
The first tranche of funding for the project came in on Monday, he said.
Early estimates have put the value of the factory at $150 million but Mr McDonald said the overall project value was much higher.
Mr McDonald said demolition would take place in the near future of the old 34-metre-high chimney and an old shed at the former Bonlac factory site where CDI plans to build two milk driers to produce whole milk powder and infant formula.
Most of the Camperdown factory was demolished earlier this year.
The staged construction of the CDI plant was likely to get under way in the “very near future”, Mr McDonald said.
CDI plans to be a vertically integrated business with control of milk supply through to the operation of the processing facilities and export of dairy products.
It is 90 per cent owned by Mr McDonald’s Brisbane-based MCG Group that has a portfolio of investments in mining, property and agriculture and 10 per cent owned by agricultural investment company, the EAT Group.
