Chinese takeaway millions from failed dairy venture

THERE’S an old Chinese proverb which says: “If you are patient in one moment of anger, you will escape a hundred days of sorrow.”

And such seems to be the case for the giant China-based Ningbo Group, a diversified import-export company which purchased five South Gippsland dairy farms, including two in the lush, green Bass River Valley at Kernot, 10 years ago.

The moment of anger may have come on August 19, 2015, at a monthly Bass Coast Shire Council meeting when councillors, responding to a community uprising, voted unanimously to refuse an application made by a subsidiary of the Ningbo Dairy Group, to establish a $6 million intensive milk processing operation, capable of producing up to 30,000 litres of milk per day, to be bottled locally for direct export to China.

Council’s and the community’s reasons for rejecting the proposal were many and varied but according to one of those opposed at the time, Phil Westwood, an egg producer at Grantville, it all came down to the impact on local waterways.

“Apart from being an inappropriate place for a development of that scale, the main issue was the potential for pollution of the Bass River,” said Mr Westwood.

“If you are going to house 1000 cows inside, with supplementary feeding to increase production, the amount of manure you would create, and the size of the sewage pits, would be enormous.”

The council listed its reasons for refusal as concern about the “over-intensification” of the dairy operation, and the proximity of the agricultural barn and manure pits to the township and nearby houses.

It said the applicant had failed “to sufficiently demonstrate that environmental degradation will not occur on the downstream water quality and catchment” and that the height and scale of the agricultural barn and bottling plant was inconsistent with land use in the Farming Zone.

For years the project lay dormant, then in disrepair, and according to an article in the Weekly Times, by Peter Hemphill, in January 2019, the two farms at Kernot became a breeding ground for thistles with cattle regularly straying, to the chagrin of locals. The Australian arm of the company, Australian Yoyou Dairy Pty Ltd, spent five months in liquidation in 2018 because it allegedly would not pay its bills to local businesses.

The cows were ultimately sold.

“The idea was lauded,” said Hemphill, which isn’t entirely true.

“But the reality of the Ningbo dairy plan is a mess no one wants to own.”

Turns out, however, that it is a problem someone not only wanted to own but also to fix.

Earlier this year, the property located at 1010 Loch-Kernot Road, Kernot, which was to become the centre of what was projected to be a $15 million, vertically-integrated milk bottling operation in the region, flying milk direct to China, was sold for $11.4 million.

And the locals say, the property has never looked better.

It is not known how much Ningbo netted from the sale of three other farms they reportedly owned in the Tenby Point area.

But, if the Kernot result is any indication, they got their money back, and then some.

The 596-acre Kernot dairy farm was originally purchased in September 2013 for $5.4 million.

Hopefully the local suppliers also got their money back as well.

Scott Andersen of Andersen Property Specialists, San Remo, made the sale but declined to comment further.

It is understood that the farm, on the edge of the quiet hamlet of Kernot, was purchased by a large, city-fringe property developer.

It is not known, beyond operating it as a highly-productive grazing property, what if anything else, the new owner intends to do with it.