Chinese flooded with land offers

Brad ThompsonThe West Australian
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Companies linked to China's biggest agricultural conglomerate are being flooded with offers to buy or lease "hundreds of thousands" of hectares of land in the Wheatbelt in the early stages of their bid to create an independent grain supply chain from the port of Albany.

They have leased five farms and are considering leasing at least two more for this season in addition to three sprawling farms bought since October as part of an initial $150 million spending spree.

The two companies involved in the project supported by the Beidahuang Group - Vicstock Grain and Heilongjiang Feng Agricultural - have planted crops on 40,000ha and are eyeing an additional 8000ha.

Vicstock managing director Will Crozier said the Chinese backers of the project welcomed recent comments from Premier Colin Barnett endorsing foreign investment in WA agriculture.

"It was huge for us and gave our people both here and back in China a lot of heart and a lot of confidence to keep investing in this project," Mr Crozier said. "We are already proving the worth of this investment in WA agriculture and we can keep improving on that."

A report from Landmark Harcourts shows overseas and local investors spent $355 million buying 56 rural properties of 40ha or more in WA in the first quarter of this year. WA topped the list for sales revenue, with NSW next on $196 million.

Vicstock and HFA hope to build up to grain exports of one million tonnes a year from Albany after taking a long-term lease on land at the port. They plan to begin bulk exports early next year after a preliminary $10 million upgrade of a shed and woodchip loader.

The work has been delayed because Vicstock and HFA are in talks with a multinational joint venture partner on operating the port facility.

They already have a deal with Albany Bulk Handling, a joint venture between Asciano - Australia's biggest rail freight and ports operator - and Japanese company Itochu, to load the grain.

Mr Crozier said the Albany facility would be developed in stages, with plans for the construction of upright silos and major upgrades of the harbour and wharf.

HFA has spent $70.5 million buying farms comprising 36,500ha in areas with good port access over the past eight months. It has leased farms in the same areas as part of developing a supply chain to compete with CBH.

The holdings also include about 10,000 sheep and a substantial cattle feedlot.

Vicstock and HFA have employed local staff and used local suppliers for their farm operations, which have included the use of two 27m precision seeding rigs.

"We have been inundated with properties to lease, we have been inundated with properties to buy," Mr Crozier said.

"There's been hundreds of thousands of hectares offered to us outside that (Albany) zone. We're not contemplating them at the moment because of operational issues but that's not to say we won't get up there in two or three years."

Mr Crozier said leasing farms gave Vicstock and HFA more flexibility to scale the project up or down, but he was confident that their investments would grow rapidly in the next few years.

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