Van Dairy owner says he is staying put

There has been speculation the owner of the Van Dairy Group, billionaire Xianfeng Lu, was divesting some of his best assets with the recent sale of a key dairy from Woolnorth, in northern Tasmania.

But Mr Lu this week said he would reinvest proceeds from the recent farm sale back into the operation and further his plans to grow Van Dairy.

Mr Lu bought Woolnorth in 2016 for $280 million but after selling off some "outside farms", the recent sale of a core asset saw it continue to shrink in size.

Van Dairy, formerly Moon Lake Investments and Van Diemens' Land Company before that, has attracted a lot of attention over its foreign ownership and farm operations.

The company milks more than 11,000 cows across 17,000 hectares as one of Australia's biggest and oldest dairy operations producing more than 100 million litres of milk annually.

Van Dairy recently sold the 900 hectare Harcus Dairy which was part of the key Woolnorth group of properties on the north-western tip of Tasmania.

Mr Lu sold Harcus Dairy, part of the Gums dairy and the Heifer Unit near Smithton, to Tasmanian-born businessman Tim Roberts-Thomson.

The Roberts-Thomson company - TRT Pastoral Group - also owns land in Victoria and on King Island and is believed to have taken about 6000 hectares of Woolnorth in total.

TRT expects to build stocking on its Woolnorth land to about 7000 Angus breeders.

Earlier this year, Melbourne-based investment group Prime Value Asset Management paid $62.5 million for 11 surplus dairy farms across 2200ha outside Woolnorth from Van Dairy.

The price included 5000 cows and yearlings.

At the time Mr Lu, who has been living at Woolnorth, said these smaller farms were sold as part of a commitment to have 10 per cent Australian ownership of the property.

"VDL is always looking at opportunities to create value through sales and acquisitions," a spokesman for the company said at the time.

Agents for Harcus Dairy, Nutrien Harcourts, said the sale included the 80 unit rotary dairy, large calf rearing shed, machinery shed, and four homes.

Harcus Dairy was among Van Dairy assets which were served environment protection notices from the Circular Head Council.

A government audit found 83 per cent of the company's 23 farms had failed to comply with the Farm Dairy Premises Effluent Management Code of Practice.

A Tasmanian Dairy Industry Authority said it would continue to have regular on-ground presence at the farms to conduct animal welfare checks.

There has been criticism over the operational strategy used at the farms which has seen a big lift in herd sizes but little consideration to disposal of the increased effluent.

MORE READING: AWI election drama, accusations of vote rigging.

Mr Lu's bought the Van Diemens' Land Company in 2016 after it had been owned by several overseas companies over the years notably from the UK and New Zealand.

On Monday, Mr Lu said he was committed to the future development of the property.

He said dealings in landholdings were part of normal business activities and funds from the sale would be reinvested in the broader property.

"My goal is to build a high-quality international dairy company and I remain committed to this outcome," Mr Lu said.

"We want to make VDL a well known international brand.

"We are committed to creating a world-leading, environmental best practice and vertically integrated dairy operation which blends seamlessly with the Tasmanian brand.

"We are looking forward to working with all interested stakeholders and parties to deliver upon the vision and progress our plans."

The company also hopes to build a powdered milk factory at Woolnorth.

Start the day with all the big news in agriculture! Sign up below to receive our daily Farmonline newsletter.