CONTENTS

Opportunities in China

Outcome:  To develop new Chinese markets for South Australian and Australian milk products and to develop good relationships with potential Chinese investors.

Project Activities and Achievements:

• Review New Export Opportunities with China
  Sarah Xu, Asian Marketing Manager, Dairy Australia Appendix 34
  
  As part of the review of new export opportunities for South Australian and Australian dairy products, Sarah XU, Asian Marketing Manager for Dairy Australia, presented information on Asian Market Opportunities to the Dairy Industry Development Board and other industry representatives.  Sarah provided information on the current consumption and domestic production, the growth expectations, specific Chinese product requirements and the potential for South Australia to become part of this market.  A further meeting was held in Melbourne to discuss how South Australia can work with Dairy Australia to develop trade alliances.  Dairy Australia has invited South Australian representatives to be involved in a joint trade delegation to China to explore opportunities in March 2006.
  
  
• Providing Targeted Information to Potential Chinese Investors
  Australia China Dairy Conference 2004   Appendix 35
  
  Sally Schultz, Manager, Dairy Plan Implementation, Tony Morbey, Principal Industry Consultant, Dairy, PIRSA and Grant King, Chief Executive of the Limestone Coast Regional Development Board were invited to attend the 2nd Australia China Dairy Conference and Exhibition in November 2004 in Sydney.  The Conference was run by Yosica Dairy Group.  Yosica specialises in  exporting dairy products, food and livestock to China.  In 1999 Yosica was the 20th largest exporter in Australia.  Yosica is also involved in assisting Chinese business delegations to explore investment opportunities and business partnerships in Australia.  Specifically they are looking at building a processing plant and purchasing dairy farms.  They have a keen interest in the South East Region of South Australia.
  Grant King, and Sally Schultz presented at the conference on ‘Dairy Farming in the South East of South Australia’.   We presented to approximately 80 mostly Chinese delegates, covering a range of topics from skilled workforce, government support and immigration policy to dairy farm management, climate, soil, water, land and processing potential.
  
  
• Developing Trading Alliance through Joint Delegation Process   
  Yosica Group Tour of the South East Dairy Region  Appendix 36 &37
  
  Following on from the 2nd Australia China Dairy Conference and Exhibition a delegation of approximately 45 Chinese delegates visited the South East region for a tour.  The tour, jointly hosted by Sally Schultz, Tony Morbey and Grant King began with a presentation on the features of the South East and the suitability for investment in both pre and post farm gate.  The tour started with looking at potential dairy processing sites around Mt Gambier.  We then visited some local tourist spots, followed by a tour of the lobster factory. In the afternoon we visited Donovans Dairy, the largest dairy in the South East and watched them perform a milking.  The Limestone Coast Regional Development Board together with the Agricultural Development Partnership hosted a dinner that evening with our minister, Hon Rory McEwen, local councillors and distinguished guests.
  
  Following the visit to the South East, Yosica developed a business proposal for ‘Development of Business In South Australia with China’ to our Minister Rory McEwen(attached).  Both Grant King and Sally Schultz are continuing to liase with Yosica.
  
  Chinese Delegation to visit South Australia
  Dairy Australia's annual Scholarship China program will take place from 8 - 19 July 2006. The theme of this year's training is dairy strategy, management and marketing, targeting at the dairy executives from the key Chinese dairy companies. Eleven participants have been confirmed, most of them at vice GM level.
  
  The group are visiting Adelaide as part of the program to show them the dairy industry in South Australia. The ADP project will be providing two presentations to the group ‘South Australia dairy industry overview and key dairy players’ and ‘SA's dairy strategic plan’. There will also be some time for open discussion on the possible cooperation opportunities between SA and China.
  
  
• Developing Trading Alliances - Confidential
  Numico Australia
       
  The ADP Project has been involved in developing a business case for Numico Australia to develop product specifically for a niche Asian market.   Numico is a South Australia high growth, high margin specialist nutrition company.  They have developed a whey protein concentrate process and hyper immune milk product at pilot scale that is proving to be clinically effective. The ADP has provided some financial support to employ Steve Spencer a specialist consultant to assist in the preparation of a concise strategy for scaling up production of hyperimmune (HI) whey protein concentrate to supply an Asian market. 
  

Financial Analysis