Andrew Forrest eyes WA dairies

Brad ThompsonThe West Australian
Forrest eyes WA dairies
Camera IconForrest eyes WA dairies Credit: The West Australian

Mining billionaire Andrew Forrest has emerged as the potential new owner of WA's biggest single milk producer as he weighs up more investment in farming and food processing.

It is understood Mr Forrest's Minderoo Group recently cast an eye over both Lactanz Dairies, near Scott River in the South West, and the Brownes dairy processing plant in Balcatta.

Mr Forrest's interest in the local assets was revealed as WA-based livestock exporter Wellard celebrated a $100 million deal to supply 22,500 dairy cattle to the Sri Lankan Department of Economic Development.

Wellard will source Friesian Jersey-cross heifers from around Australia and ship them to Sri Lanka over the next two years.

The Wellard deal, financed by Rabobank and backed by Australia's Export Finance Investment Corporation, includes management and veterinary support.

Wellard will also set up a farm and build a dairy as Sri Lanka builds on the success of earlier consignments of 2000 cattle.

Lactanz, which has no link to the Wellard deal, boasts about 4000 milking cows and 1500 rising heifers. It churns out about 16 million litres of milk a year under a supply contract with Brownes, which expires at the end of June.

In the hands of receivers Ferrier Hodgson for more than 14 months, Lactanz is being marketed by CBRE for about $30 million.

Expressions of interest close on Friday, with Minderoo believed to be one of a number of interested parties. The others include Chinese, Indonesian and Middle East interests.

Local processors Brownes, Harvey Fresh and Lion are also keeping a close eye on the sale as they battle for milk supply in WA.

Brownes owner Archer Capital has been trying to sell off part or all of the WA processor. The private equity fund has made no official comment on a sale process which values Brownes at more than $200 million.

Industry analysts said securing Lactanz could provide Mr Forrest with a significant bargaining chip in negotiations on the future of Brownes.

Mr Forrest snapped up Harvey Beef from another private equity fund, Pacific Alliance Group, for about $45 million in May.

The Sri Lanka deal is a boost for Wellard after a major fire on its flagship vessel the Ocean Drover this month which left one crewman injured.

The Ocean Drover is almost certain to be towed to Singapore for repairs that are expected to cost about $10 million.

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