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Sweet Australia deal for local firm
By Richard Fu |
November 21, 2012, Wednesday
|
Print Edition
Print Edition
Property company Shanghai Zhongfu Group has won the right to develop a farm project in Australia, pledging to invest A$700 million (US$728 million) to establish a sugar industry there.
The Western Australia state government yesterday announced Kimberley Agricultural Investment as the preferred proponent to lease and develop 13,400 hectares in the Ord-East Kimberley region into irrigated farmland. KAI is wholly owned by Shanghai Zhongfu, whose parent is a construction group.
The deal marks the latest efforts by foreign investors to secure agricultural resources in Australia, the world's third-largest sugar exporter. China's state grain trader, COFCO, last year won control of Tully Sugar Ltd, one of Australia's largest sugar millers, while Thailand's Mitr Phol Sugar Corp has also bid for Queensland's MSF Sugar Ltd.
KAI proposed to invest up to A$700 million over the next six years in the area to annually produce about 4 million tons of cane and 500,000 tons of export sugar crystal. Australia's total sugar exports are expected to rise to more than 3 million tons in the 2012/13 fiscal year although a strong Australian dollar is set to present a constraint to higher exports.
The project was a major step toward the region reaching its full potential, Western Australia Premier Colin Barnett said.
"This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for East Kimberley and northern Australia," he said in a statement.
KAI Chief Executive Yin Jianzhong was quoted by Australian national news agency AAP as saying that there were still challenges to overcome in Western Australia. "There are still significant challenges ahead to develop this project to its full potential and achieve the economies of scale KAI requires for this to be commercially viable," Yin said. "But we have the skill set to overcome the many challenges this project represents."
The Western Australia state government yesterday announced Kimberley Agricultural Investment as the preferred proponent to lease and develop 13,400 hectares in the Ord-East Kimberley region into irrigated farmland. KAI is wholly owned by Shanghai Zhongfu, whose parent is a construction group.
The deal marks the latest efforts by foreign investors to secure agricultural resources in Australia, the world's third-largest sugar exporter. China's state grain trader, COFCO, last year won control of Tully Sugar Ltd, one of Australia's largest sugar millers, while Thailand's Mitr Phol Sugar Corp has also bid for Queensland's MSF Sugar Ltd.
KAI proposed to invest up to A$700 million over the next six years in the area to annually produce about 4 million tons of cane and 500,000 tons of export sugar crystal. Australia's total sugar exports are expected to rise to more than 3 million tons in the 2012/13 fiscal year although a strong Australian dollar is set to present a constraint to higher exports.
The project was a major step toward the region reaching its full potential, Western Australia Premier Colin Barnett said.
"This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for East Kimberley and northern Australia," he said in a statement.
KAI Chief Executive Yin Jianzhong was quoted by Australian national news agency AAP as saying that there were still challenges to overcome in Western Australia. "There are still significant challenges ahead to develop this project to its full potential and achieve the economies of scale KAI requires for this to be commercially viable," Yin said. "But we have the skill set to overcome the many challenges this project represents."
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