Chinese construction group to develop sugar mill, biofuel project in Western Australia

Western Australia’s (WA) Premier Colin Barnett announced that Kimberley Agricultural Investment (KAI), which is wholly owned by China’s Shanghai Zhong Fu Group, is the preferred proponent to lease and develop 13,400 hectares into irrigated farmland in the state under the Ord-East Kimberley Expansion Project. The Kimberley project would open new tracts of farmland to irrigation from the waters of the Ord River and Lake Argyle.
Shanghai Zhong Fu’s parent company is major Chinese construction group Shanghai Zhongfu Real Estate Co. The Kimberley project is the first investment in Australia by the Shanghai-based property company, which is still negotiating rent and will look to start clearing land from 2013.
KAI plans to invest up to US$700 million (US$731.6 million) in the next six years to establish a sugar industry in Kununurra in far northern WA, to annually produce about four million tons of cane.
KAI is also proposing to build a A$425 million (US$444.2 million) sugar mill in the area. The firm’s plans could also include building an ethanol plant, which could produce biofuel from sugar, the state government said. Zhongfu’s President Pui Ngai Wu said investment in a sugar mill and other infrastructure would depend on further negotiations with local governments and environmental approvals.
Barnett said the project was a key step towards the region reaching its full potential.
“This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for the East Kimberley and northern Australia,” Barnett said in a joint statement with WA Regional Development and Lands Minister Brendon Grylls.
The move comes after a number of high-profile deals involving Chinese investors, including the purchase of the country’s biggest cotton farm, as well as foreign takeovers in its deregulated wheat industry.