Thursday 20th Sep, 2018

Long-term dairy play puts Toowoomba on export map

An artist's impression of the Toowoomba Integrated Milk Project.
An artist's impression of the Toowoomba Integrated Milk Project.

WHEN Toowoomba’s Wellcamp Airport opened in 2014, the vision was to provide access and opportunities for communities across southern Queensland and facilitate investment in business and trade.

And despite much skepticism, this vision may yet be realised.

Construction is due to begin in January of a $50m dairy processing facility adjacent to the airport, another step towards expanding a viable export task.

“The Toowoomba Premium Milk (TPM) factory is a watershed moment,” said Bruce McConnel, general manager of Food Leaders Australia. “It’s the first agricultural processing industry to move to Toowoomba based around access to our unique infrastructure”.

Supported by business group Toowoomba and Surat Basin Enterprise and other key stakeholders, Food Leaders Australia has supported the development of the TPM and other initiatives that benefit from intermodal connectivity with export markets.

“What we are seeing is interest from the Middle East in investment and China… it just makes sense that Toowoomba is becoming the inland port of Australia,” said Mr McConnel.

The airport now has more than 80 weekly passenger flights and just marked the first year of operation of its weekly international freighter service to Hong Kong. Capabilities are expected to be enhanced with the addition of Inland Rail within the next decade, creating a fast link to southern states.

This could grow to “a freighter a day” according to Mr McConnel, when the TPM reaches its full potential in 2020. At that stage of the project, the TPM would be producing up to 200,000 litres of fresh milk daily.

“That is the most exciting part about what they’re doing,” he said. “You start to get efficiency of freighter services in the region at that stage and that allows other industries like horticulture to access Asian markets with daily or bi-daily flights”.

But to begin with, the TPM is to build a plant that produces infant formula from milk powders sourced from around Australia, mixed at the Toowoomba plant and then sent by sea to export destinations from the Port of Brisbane.

“It’s responding to worldwide demand that is outstripping supply for infant formula,” said Mr McConnel, adding China and Vietnam would be key buyers of premium formula from Australia.

“The project is primarily debt funded and they are also looking for private equity investors for Stage Two and Three,” said Mr McConnel.

Stage Two is to involve the move to fresh milk export which is a win for local dairy producers.

Stage Three will include development of a 10,000 head dairy farm near the Queensland-NSW border that would deliver about half of the TPM’s fresh milk needs.

“From a dairy producer’s perspective at the moment, the contracts they are being offered by buyers are at or below break-even,” said Mr McConnel.

“This brings another buyer into the market and that competition will drive farm gate prices up for producers.”

There are also further opportunities arising from the TPM project, says Mr McConnel.

“When it moves into stage-two it will have distilled water and waste heat as byproducts of its processing.

“We are looking at developing hydroponics to use the waste water, to grow leafy vegetables,” he said.

“It’s one of the exciting things about what’s happening in this region… the development methodology,” said Mr McConnel.

“The benefit of Toowoomba is that everything is new… there is a lot of greenfield industry, which we can place around each other to ensure the synergies work in the most constructive way.”

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