It has been less than 18 months since miner Bill McDonald announced plans for a dairy empire on the border of Victoria and South Australia.
But he and the company have confirmed Mr McDonald’s decision to abandon the industry, instead re-investing his money in coal.
“The deal is confidential but the shares held by Bill McDonald in CDI have been transferred,” chief executive Gavin Evans said in a statement.
“Otherwise it is business as usual.”
The announcement comes after CDI’s confirmation that its $500 million plan to produce and process milk had been put on the backburner.
Initial plans – to buy up farms, build a 40,000-strong dairy herd, upgrade a Camperdown milk factory to the tune of $200 million and employ more than 200 staff in south west Victoria – are all on hold.
Mr Evans cited setbacks caused by a global oversupply of product and uncertainty around Chinese import regulations for the change of plans.
But he today stressed that the company remained confident about its business model going forward, which was focussed around manufacturing value-added products at its Braeside facility.
“We are still producing quality dairy powders for the global market,” he said.
“We continue to develop contracts with significant counter parties who will work with us to grow the business … and look forward to further success as we move towards a new year in 2017.”
Dairy confidence short-lived
Mr McDonald’s 2015 investment in the dairy industry was meant to be the start of great things, with the businessman pointing to “huge potential” in June 2015.
He was raised on a mixed farm in south west Victoria, but by 2004 it was mining that consumed his time.
By 2008, Mr McDonald had started exploring and buying up coal mine leases.
He sold those assets when the market hit its peak in 2012 and was listed ninth on Australia’s ‘Young Rich List’.
Along with property development, Mr McDonald set his sites on agriculture.
A fully integrated dairy empire was to be followed by a similar red meat enterprise, which would promise traceability to overseas consumers.
But in 2015, dairy was the more alluring industry.
“Money. Pretty simple,” Mr McDonald said in June last year.
“We think there’s a huge potential there and there’s a hole in the market … I think it’s performed very well for an agricultural industry.”