A WA processor is targeting bulk fresh milk exports to China as the State Government continues to shop around for a major overseas investor in the dairy industry.
Brownes managing director Ben Purcell warned that tough trading conditions were holding back the local industry despite the demand on WA's doorstep.
Mr Purcell said Brownes was already exporting bulk fresh milk to Taiwan and fielding inquires from China.
"It (China) is a complicated supply chain and we would need to find the right local partner but it is on our agenda," he said.
Mr Purcell showed about 30 Chinese business people and government officials around the company's Balcatta processing plant yesterday. They were part of a big contingent of Chinese who have looked at investment opportunities in WA agriculture over the past three days.
The Department of Agriculture and Food WA-hosted events and site visits also showcased investment opportunities in beef, grains, sheep, wine and fodder.
DAFWA has continued to spruik its plan for Chinese investors to buy dairy farms and build processing infrastructure as part of a $650 million project to double the size of the industry in WA.
The investment blueprint, circulated in China and South-East Asia since early last year, is based on producing about 30,000 tonnes of whole milk powder a year.
Mr Purcell said such an investment remained highly unlikely even if Australia was successful in striking a free-trade agreement with China which included major concessions for dairy exports that are at least equal to those in New Zealand's 2008 FTA.
Industry sources said the DAFWA investment plan did not make economic sense even in the context of the unprecedented bidding war which saw Montreal-based Saputo secure Warrnambool Cheese & Butter. The deal valued WCB, which processes almost 900 million litres of milk a year, at $537 million.
Milk production in WA fell to 336.6 million litres in 2012-13.
Brownes and Harvey Fresh, the latter of which was acquired by Parmalat for about $120 million last week, have processing capacity to increase exports but need more milk. Both say they will work to boost supply.