Mitsubishi to acquire 24% stake in Tasmanian Dairy Products

Japanese trading firm Mitsubishi has reached an agreement to acquire a 24% stake in Australia-based Tasmanian Dairy Products, as a part of a strategic partnership.

Following the agreement, Murray Goulburn, which sold the stake to Mitsubishi, will remain the majority shareholder of Tasmanian Dairy Products with a 56.1% stake, while local Tasmanian investors will hold 19.9% equity.

Murray Goulburn managing director Gary Helou said the co-operative has worked closely with Mitsubishi as a customer of dairy ingredients, and as a strategic investment partner in several manufacturing joint-ventures.

"Tasmanian dairy farmers have already shown tremendous support for the new venture including many in the northwest of the state that have committed to supplying the new company," Helou added.

Tasmanian Dairy Products’ plant is expected to go onstream in September 2012 and will supply dairy products to markets in Asia and the Middle East.

It will have the capacity to process approximately 250 million litres of milk into dairy food ingredients such as whole milk powder, skimmed milk powder and anhydrous milk fat.

The plant will be located in Smithton, northwest Tasmania, where major farms supplying raw milk lie within a 50km radius of the plant, which will lower transport expenses and improve the company’s cost competitiveness.

The company also noted that the deal will help build up a strong dairy product supply chain, expand its dairy manufacturing business, and supply dairy products to Asian markets including Japan.

Tasmanian Dairy Products is a A$75m ($76.12m) dairy processing joint-venture in northwest Tasmania, established by Australian dairy co-operative Murray Goulburn and other investors.

Murray Goulburn announced the plans to create a dairy co-operative in September 2011 as part of its overall strategy to provide improved returns for dairy farmer shareholders.

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Image: The deal to acquire a stake in Tasmanian Dairy Products is a part of Mitsubishi’s plan to expand its dairy manufacturing business and to build a strong dairy product supply chain in Asian markets. Photo: Alessandro Paiva.