A major Chinese agribusiness has entered into a joint venture to develop new large scale dairy farms in southest Australia.
China has moved quickly to develop new sources of milk in Australia in the wake of a free trade agreement between the two countries.
Australian company Freedom Foods Group has signed a memorandum of understanding with China's New Hope Group to develop a long term supply of milk with the establishment of new large scale farms in southeast Australia.
The farms will be managed by the Perich Group, which holds a stake of about 60 per cent in Freedom Foods.
New Hope will be a core investor and partner, while continuing to market and distribute dairy products into China through New Hope Dairy.
New Hope Group, one of the largest suppliers of meat, eggs and dairy products in China, has established an investment fund of up to $500 million to be used in the development of agricultural and food processing in Australia, with a substantial proportion to be invested in the dairy sector.
"Australia has a unique advantage in the supply and manufacture of high quality premium agriculture based foods," Freedom Foods managing director Rory Macleod said.
"With increasing demand from markets in China and southeast Asia for high quality value added product, Australia through companies such as Freedom Foods Group and Perich Group are well placed to play an important role in the development of this supply chain."
Freedom Foods' products include allergen-free cereals and UHT (long-life) food and beverages.
Freedom Foods is the largest shareholder - with an 18 per cent stake - in the a2 milk company, which markets a2 branded dairy milk and infant formula in Australia, UK and China.