Dairy giant Van Diemen's Land Company returns to profit
Australia's oldest dairy farming business, Van Diemen's Land Company, has fought its way back into the black.
The company in north-west Tasmania posted a $9 million loss last financial year.
CEO Trevor Westacott said VDL has turned that around this year, with a $7.2 million profit on the back of record milk production.
"A good combination of good season, good milk price, good work by our people and good strategies have contributed to a very strong result," he said.
The company has been trying to attract investors for a $180 million expansion.
At the same time there were indications the company's main shareholder, New Plymouth District Council, would sell its stake.
Mr Westacott said the good results made VDL more attractive to investors.
"It think any investor in agriculture would take a long-term view, but yes certainly all investors would be more impressed by the result this year," he said.
He said there had been a spike in interest, both domestically and overseas, over the last six months.
"There are a number of initiatives at the moment, a number of investors are engaged in discussions with the major shareholder," he said.
Farm gate milk prices hit record highs over the past year, but were set to fall.
The global dairy price has lost 40 per cent this year, which will translate to reducing milk prices.
Mr Westacott said the prospect of falling prices presented a challenge.
"That's going to test us," he said.
"We're working at the moment at putting in place strategies to limit that, but we do have 70 per cent of our prices fixed."
The company was still waiting on Commonwealth environmental approvals for land clearing associated with the expansion plans but was confident it would increase milk production again this year.
