Capacity the prize for Parmalat

Brad ThompsonThe West Australian
Capacity the prize for Parmalat
Camera IconCapacity the prize for Parmalat Credit: The West Australian

Italian dairy giant Parmalat has revealed Harvey Fresh's untapped processing capacity was a major factor in its acquisition of the prized WA agribusiness.

Parmalat chief executive Craig Garvin said the company wanted to grow the supply of milk in WA as part of its plan to boost domestic sales and exports.

Mr Garvin also suggested Parmalat might extend its flavoured milk distribution agreement with Mrs Mac's to include juice products in growing its footprint in WA.

The $120 million sale of Harvey Fresh continues a run on WA dairy assets that has seen Mundella and the Margaret River Dairy Company sold to a company controlled by China's Bright Foods.

Mr Garvin joined Harvey Fresh director Kevin Sorgiovanni in addressing workers at the Harvey processing plant about the change in ownership.

"Our intentions are about growth, we want to grow the domestic market but we also want to grow exports," Mr Garvin said.

"Our goal is to grow milk supply in WA and to do that we'll work closely with farmers, which we have a strong track record of."

Figures from Dairy Australia show milk production in WA continues to fall despite the interest in processing assets.

Production fell to 176.7 million litres in the first six months of this financial year, down from 182.8 million litres in the same period in 2012-13.

Mr Sorgiovanni said the Harvey Fresh brand was well known in South-East Asia through its extended shelf life milk exports.

He said Harvey Fresh had fielded numerous enquires from investors in the region before sealing the deal with Parmalat.

Mr Sorgiovanni said the plant at Harvey could virtually double production overnight if milk supply and demand increased.

Harvey Fresh processes about 130 million litres of milk a year and has the contract to supply Coles supermarkets in WA.

It also produces about 100 million litres of fruit juice at its operations in Griffith, NSW.

Mr Garvin said Australian dairy products were highly sought after in Asia.

"Over time it is important to be able to convert that into value-added production," he said.

Parmalat struck a deal with Mrs Mac's last year to distribute flavoured milk products produced interstate.

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