22/12/2014 - 15:58

Rinehart backs WA dairy expansion

22/12/2014 - 15:58


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Iron ore magnate Gina Rinehart has agreed to invest in WA business Bannister Downs Dairy, to support a planned $20 million-plus expansion of the niche dairy producer.

Rinehart backs WA dairy expansion
Bannister Downs managing director Sue Daubney.

Iron ore magnate Gina Rinehart has agreed to invest in WA business Bannister Downs Dairy, to support a planned $20 million-plus expansion of the niche dairy producer.

Bannister Downs managing director Sue Daubney said she was planning a four-fold increase in production by the Northcliffe-based business.

“We’re very excited to have found a partner who is West Australian, and someone who also understands agriculture,” she told Business News.

Mrs Daubney said Bannister Downs was currently operating at capacity.

“We can sell everything we produce at the moment.”

She had evaluated debt funding and foreign investment options before finalising the current agreement.

The backing from Mrs Rinehart meant Bannister Downs could proceed with a ‘greenfields’ project involving robotic milking and fully automated processing.

Mrs Daubney said she first made contact with Mrs Rinehart in 2010, after winning Business News’ 40under40 award that year.

“She sent an email congratulating me on winning the First Amongst Equals award, which was pretty amazing.”

The two women have stayed in touch since then, though Mrs Daubney had assumed that Mrs Rinehart would not be interested in backing a business like Bannister Downs.

“I thought we would be too small, but I had a chance meeting with some of her people in September and it came together very quickly after that.”

Bannister Downs would continue to focus on supplying a premium, high quality product to the West Australian market.

“Down the track we will look at high-end Asian markets but our focus is on our local customers and ensuring we can supply them.”

Mrs Daubney said she would also maintain Bannister Downs' ethical practices, evidenced by the way its cows are looked after and the environmentally sustainable packaging it uses. 

Bannister Downs is run by Mrs Daubney and her husband Mat, whose grandparents establihed the dairy farm in 1924.

They started producing their own premium milk product after the dairy industry was deregulated in 2000, resulting in lower prices for farmers who sold at the farm gate.

The Bannister Downs investment, for an undisclosed sum, is the latest in a string of agricultural investments by Mrs Rinehart, whose family has a long history in the Pilbara pastoral industry.

Early this year, she outlaid $40 million to establish a joint venture with Graham Laitt’s Milne AgriGroup.

The Liveringa Station Beef joint venture has acquired the Liveringa and Nerrima cattle stations, located on irrigated pastures in the Kimberley, and a mothballed abattoir at Waroona south of Perth.

In the dairy sector, her company Hancock Prospecting announced plans in November to invest $500 million buying 5,000 hectares of farm land in Queensland and building an export-focused processing plant.

Hope Dairies, majority owned by Hancock Prospecting, plans to process 30,000 metric tonnes, equivalent to 35 million tins, of infant formula per year, and begin exporting in late 2016.

Last week, Mrs Rinehart spent $25 million buying two Wagyu beef stations in NSW.



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