The tiny town of Kernot could receive international exposure if the controversial proposed milk processing facility is approved.
‘KERNOT’ brand milk could soon line supermarket shelves if a proposed processing facility is built in the small rural hamlet.
Jon McNaught from GHD, the global consulting company handling the application on behalf of the Tenby Point-based company Yoyou Dairy, a subsidiary of Chinese milk giant Ningbo Dairy, revealed that location-specific product branding is all part of the company’s grand plan to expand its presence in Australia.
“Their intention is to brand the milk as the Kernot brand – to build it as an identity,” Mr McNaught said.
The exported milk is expected to fetch upwards of $7 a litre in China’s retail market.
Whilst this is expected to give Kernot some international exposure, it’s also going to be marketed in Australia, albeit at a much cheaper price, in order to boost brand recognition in China.
This branding, Mr McNaught explained, would tie in with other locations where Yoyou hopes to build similar facilities in the near future.
“This is the first one and they are looking at having six or seven of these plants in Australia over the next five years,” he continued.
“If (the Kernot facility) was successful, it would allow them to expand further.”
He said “one or two” additional facilities could be built in Gippsland, but ruled out the Tenby Point property owned by YoYou as a location because it’s too small.
Mr McNaught also revealed that if the $6 million development proposed for Glenview Farm at Kernot goes ahead, Yoyou may seek to make the expanded dairy at that location even larger.
“But that would be subject to a separate planning and approval process,” he noted.
The current planning application lodged with Bass Coast Shire Council on December 22 comprises a large feeding barn, bottling plant and cool store to be built on the 240ha property.
Councillors will vote on whether to approve the project on April 15.
Speaking further on what he regards as positive aspects of the development, Mr McNaught said the project will create jobs, which will subsequently bring more revenue into the local economy.
He said seven full-time positions will need to be filled by locals when the facility is operational.
“That alone means seven families have additional incomes.
“Apart from that, there will also be somewhere between 20 and 40 jobs created during construction.”
Town meeting this week
Mr McNaught will be answering questions raised by the community at a council-run meeting at Kernot Town Hall this Thursday, February 12, starting at 6pm.
“We’ve already had various communications with landowners in the area and we welcome more,” he said.
Opportunities with foreign investment
ASIDE from concerns surrounding the overall size and its possible environmental impact, many farmers and other landowners in the Kernot area are worried about foreign investment overall and the future of farming in South Gippsland.
Currently, China is Australia’s second-largest market for dairy exports, worth around $351 billion in 2013 – a number which is expected to grow following the Federal Government’s signing of a Free Trade Agreement (FTA) between the countries last year.
Nationals Senator Bridget McKenzie said there are many benefits to Australian farmland attracting Chinese investors.
She said such investment provides development opportunities which may not be possible otherwise.
“In terms of setting up new businesses, it provides value-adding infrastructure within our local communities, which all means local jobs,” she said.
“(But) we need to make sure any foreign investment is in our national interest.”
She said she understands farmers in places such as Kernot have legitimate concerns surrounding foreign investment of agricultural land.
“It’s a concern that I hear echoed from South Gippsland right through to Northern Victoria,” she said.
“That’s why it was reflected in our policy which we took to the last Federal Election.”
Senator McKenzie, a member of the joint parliamentary Foreign Affairs, Defence and Trade committee recently returned from a trip to India with Federal Trade Minister Andrew Robb and around 400 other delegates.
Following the excursion, she said there were abundant trade and investment opportunities across many sectors with India, including dairy.
With a population of over 1.2 billion people, India needs to increase agricultural productivity,” she said.
“Australia has the research, consulting and technology expertise to help India do this.
“Of particular interest is that while India is the world’s largest producer and consumer of dairy foods, its dairy productivity is among the world’s lowest.
“I look forward to working with Australia’s dairy industry to help India turn this around.
“Dairy is an example of natural synergies between our two nations.”