The 25 farms of Van Diemen's Land Company in Tasmania make up Australia's oldest and largest dairy operation.

Australia's biggest dairy farm operation is being put on the market by its Kiwi owners.

The Van Diemen's Land Company (VDL) in Tasmania is Australia's oldest and largest dairy farming business and is owned by the New Plymouth District Council.

Administered for the council by Taranaki Investment Management Limited (Timl) the 25 farms are believed to be worth up to $250 million.

On Friday Timl chief executive Mike Trousselot confirmed VDL was up for sale.

"Given all of the positive factors for the business and the sector in Australia, the Timl board believes the time is right to put the asset to the market and has commenced a sales process with its advisors," Trousselot said.

"The business and assets are expected to be of interest to multiple trade investors, institutional investors, sovereign funds and also agricultural funds."

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Trousselot said he expected the sales process would be finished by the end of the financial year, but he could not discuss whether there were already any interested buyers.

"All discussions with parties will be held under full confidentiality agreements," he said.

"Therefore we can't mention any names at the moment or disclose any details."

However, he did say that he expected there would be a lot of interest in the company.

"There is significant domestic and international interest in Australian agricultural assets. That's given the quality of the assets, their proximity to markets and strong domestic demand and also the weight of money looking for alternative assets away from bonds and equities.

"That's the environment we are in and people are looking at Australia."

Trousselot would not comment on Australian media reports the farms had attracted the interest of Chinese buyers, except to note it was speculative and factually inaccurate.



However it's not the first time parties from China have been fingered as interested in buying the farms.

In June 2014 New Plymouth Mayor Andrew Judd said he believed a Chinese syndicate was negotiating to take a stake in the farms.

And in 2013 it was reported by media in Australia that the Chinese Investment Corporation had held talks with Tasmanian Premier Lara Giddings about acquiring an interest in VDLfarms.

In August Trousselot announced that after almost seven years under the control of Timl, VDL had paid its maiden dividend of $A2.5 million ($NZ2.77m) to New Plymouth's council.

On Friday he said the Tasmanian farms and VDL were continuing to perform very strongly.

"The production of milk solids has reached about 150 per cent since we first acquired the business," he said.

"From just over 3 million kilos back then, to a budget this year of 8 million kilos, up on the 7.7 million kilos we achieved last year, this has been profitable.

"The farms and livestock are in great condition, the business has got good cashflow and it's achieved highly satisfactory milk prices for several years."

The farms are owned through New Plymouth council's Perpetual Investment Fund (PIF), which gradually increased its ownership in the farms to a majority holding over a number of years.

The council's PIF was created from the $259m sale of the council's shares in lines company Powerco in 2004.

The fund peaked in value at $324m in 2008, but is now worth around $230m. Over that time the PIF has pumped more than $180m back into council coffers.