Board Resigns at Chinese Firm, Owners of Largest Dairy in Australia
The largest dairy farm in Australia is owned by an investment firm in China, but the firm is going through instability after a mass resignation on the company’s board.
Moon Lake Investments purchased the Van Diemen’s Land Company (VDL) in 2015 for approximately $210 million (AUD$280 million). The purchase by Moon Lake’s owner Xianfeng Lu was scrutinized at the time and had to win approval from government officials.
VDL milks 17,900 cows on the island of Tasmania and has 17,450 acres of agriculture land. At the time of the purchase Moon Lake guaranteed 140 jobs locally while promising to create an additional 95 jobs and investing $75 million (AUD$100 million) into the local dairy industry. The Tasmanian government is allowing VDL to clear an additional 4,447 acres of native land to expand farming operations.
On April 28, the Australian non-executive directors of Moon Lake Investments and its chief executive staged a mass resignation. David Crean, Rob Poole, Simon Lyons, Keith Sutton, and Bruce Donnison all resigned, while the VDL Farms chief executive Evan Rolley will not continue working past June 30.
Crean says that the owner, Lu, would not take their advice on how to run the business such as buying irrigation equipment and the leadership structure.
“There’s inadequate irrigation, so we strongly recommended that as the number one priority that adequate water storage facilities be built to provide irrigation in future years to mitigate against drought, and that was rejected,” Crean says.
Under the company’s restructuring VDL would be owned by a holding company, which would in turn be owned by Ningbo Xianfeng New Material Co Ltd (APlus), which is listed on the Shenzhen stock exchange. Lu would also serve as the CEO for all of the companies, including the farm.
Crean and other board members disagreed with this leadership move as they believed a dedicated CEO needed to run the farm.
The board had also advised fixing lanes for cows to travel from pastures in an effort to reduce lameness and building fence to keep off wallabies that were grazing down forage.
“It’s the largest dairy business in Australia,” Crean says. “You’ve got to make that a sustainable and profitable business. We didn’t see that happening at the time we resigned. Or we couldn’t convince him to pursue that path.”
Andrew Wilkie, Australian Parliament representative for Tasmania, believes this is a bad sign for the foreign owned agriculture business.
“Instead Australia’s biggest dairy producing asset has become just another Chinese mass production center for low-value products,” Wilkie says. “No wonder the Australia board is bailing out. Those who opposed the sale were right all along.”
Another one of the promises by Moon Lake that has yet to be delivered on is a fence that will help prevent the spread of a deadly disease amongst Tasmanian Devils.
