Brownes sale secures mar­ket in hun­gry China

The West Australian - - WEST BUSINESS - Ben Har­vey and Jenne Bram­mer

WA dairy farm­ers hope the sale of Brownes to Chi­nese in­ter­ests will put a floor un­der prices and help the in­dus­try grow.

Archer Cap­i­tal an­nounced yes­ter­day it had sold WA’s old­est dairy to a con­sor­tium led by Chi­nese dairy giant Shang­hai Ground Food Tech.

The new own­ers want to restart cheese pro­duc­tion to meet de­mand in the Mid­dle King­dom.

WA Farm­ers dairy section pres­i­dent Michael Par­tridge said own­er­ship by a Chi­nese dairy com­pany would pro­vide di­rect ac­cess into a fast-grow­ing mar­ket.

Stronger de­mand for milk would nat­u­rally lead to more favourable and com­pet­i­tive con­tract con­di­tions for sup­pli­ers.

“The new owner is talk­ing about growth and talk­ing about pro­duc­ing cheese, which is nec­es­sary in help­ing WA bal­ance its sup­ply through­out the sea­sons, which has been among our ma­jor chal­lenges,” Mr Par­tridge said.

“This is not just good for Brownes’ sup­pli­ers but good for the whole in­dus­try and could set the foun­da­tion for sus­tain­able growth.”

Brownes owns a cheese fac­tory at Brunswick but it has been op­er­at­ing well be­low ca­pac­ity for sev­eral years be­cause it be­came un­prof­itable to man­u­fac­ture big amounts and there were en­vi­ron­men­tal is­sues with dis­pos­ing of the whey.

Brownes’ man­ag­ing di­rec­tor Tony Gir­gis told staff yes­ter­day that he would re­main as boss of the 130-year-old dairy, which em­ploys about 280 peo­ple and is WA’s big­gest pro­ducer of milk and cream and sec­ond-big­gest pro­ducer of yo­ghurt.

He said there would be no job losses and that the new own­ers had “a track record of grow­ing and strength­en­ing sim­i­lar busi­nesses and have af­firmed their com­mit­ment to do­ing like­wise with Brownes”.

Archer Cap­i­tal part­ner Jeffrey Lim said the Chi­nese were at­tracted by Brownes’ strong mar­ket po­si­tion in WA, its brand recog­ni­tion and rep­u­ta­tion for pro­duc­ing the high­est qual­ity, lo­cally sourced dairy prod­ucts.

“In­te­gral to the fi­nal out­come was find­ing a buyer with proven in­dus­try ex­pe­ri­ence and a record of op­er­at­ing and grow­ing sim­i­lar busi­nesses,” Mr Lim said.

Brownes said the deal meant the brand would “re­main an in­te­gral part of the WA dairy in­dus­try for gen­er­a­tions to come, while cre­at­ing ac­cess to emerg­ing over­seas mar­kets and the po­ten­tial for new prod­uct de­vel­op­ment”.

“The con­sor­tium was highly at­tracted to the Brownes Dairy business and oper­a­tions, its her­itage and long his­tory, and the pos­si­bil­i­ties Brownes of­fers to grow the Western Aus­tralian dairy in­dus­try given its strong ge­o­graphic lo­ca­tion on the doorstep to Asia,” Brownes said.

WA’s old­est dairy Brownes is look­ing to grow exports af­ter its sale to Chi­nese dairy giant Shang­hai Ground Food Tech.

Brownes chief Tony Gir­gis.

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