Crafar farms base for growth by Chinese richlister   27 Jan 2012

The purchase of 16 farms in New Zealand is a base for expansion in dairying by Jiang Zhaobai, one of China’s wealthiest men, according to the Overseas Investment Office (OIO) decision.

The OIO recommended the sale of the so-called Crafar farms to Shanghai Pengxin Group (SPGL) and associated companies and Associate Finance Minister Jonathan Coleman and Land Information Minister Maurice Williamson have approved it.

The sale by receivers KordaMentha has stoked anti-foreign investment sentiment and a rival consortium led by New Zealand businessman Michael Fay is promising a legal challenge.

The OIO decision does not reveal the sale price but says the buyer wants to invest more in New Zealand and will spend more than $NZ100 million in the next five years to promote New Zealand diary products in China.

SPGL has extensive business interests and is owned by Nangtong Yingxin Investments, a Chinese company owned 99 percent by Zhaobai Jiang and his brother Jiang Lei owns 1 percent.

Jiang Zhaobai is a Chinese and Hong Kong citizen. The professional engineer founded a real estate construction company in 1988 and is listed on the 2010 Forbes List as the wealthiest person in China.

The OIO decision says he intends to identify dairying and processing operations in New Zealand which may be appropriate for partnerships.

He does not want to build or own milk processing plans but may invest with joint venture partners in expanding capacity if it is required.

He intends to increase production at the Crafar farms, which have suffered from under investment and poor pasture quality, by investing $NZ15.75 million in the first two years. A breakdown with spending blanked out includes investment in effluent systems. The production goals in a business plan are also blanked out in the decision.

The new owner intends to sell its milk to dairy co-operative Fonterra. The size of the shareholding acquired in Fonterra via farm ownership is blanked out.

“The applicant would be interested in offering expertise from China to collaborate to develop new dairy products for the Asian, and particularly the Chinese, market such as baby formula.”

This decision suggests processing would be in New Zealand.

Jiang Zhaobai is also investing in a farm school on one of the acquired farms to be operated by New Zealand’s state-owned Landcorp, which will manage the farms purchased.

Landcorp will also help develop the applicant’s sheep business in China.

The applicant submitted that a refusal of his application may adversely affect New Zealand’s trade relations in China. The countries have a free-trade agreement.

“SPGL is a credible and well respected business in China with strong business acumen and ability,” the OIO said.

The new owner has to provide public walking access to some areas.

A joint venture owned 50 percent by Landcorp and 50 percent by the Chinese acquirer will develop and manage the farms. Landcorp is a provider of farm management services.

Forbes has Jiang Zhaobai as the 284th richest person in China.

(BusinessDesk)

Add a comment

Bookmark and Share

News

Prime Minister extends condolences to Canada

23 Oct 2014 News
Prime Minister John Key has expressed his deepest sympathies to those affected by this morning’s events in Canada. “The... more

Fighting cyber-crime one app at a time

22 Oct 2014 News
This summer Victoria University of Wellington will be home to four Singaporean students researching cyber threats. The students... more

Business

MARKET CLOSE: NZX 50 climbs to new record, led by RBD

23 Oct 2014 Business News By Suze Metherell
MARKET CLOSE: NZX 50 climbs to new record, Restaurant Brands gains on guidance Oct. 23 (BusinessDesk) - New Zealand shares rose to a... more

CarbonScape seeks $1.5M from crowd with 'green coke' offer

23 Oct 2014 Business News
Article - BusinessDesk   CarbonScape seeks $1.5 mln from crowd with 'green coke' offer By Suze Metherell Oct. 23 (BusinessDesk)... more

Living

WW100 - why did NZ fight? Was it for democracy or empire?

20 Oct 2014 ANZAC By Charlotte Everett
On Thursday 16 October, the NZ-UK Link Foundation held their Inaugural Annual Lecture at the University of London’s Senate... more

A major win for organic New Zealand wine in the European Union

16 Oct 2014 Food & Wine
New Zealand’s organic wine industry has scored a major export victory with the announcement that the European Commission... more

Property

Reform of RMA critical to reforming housing affordability

15 Oct 2014 Property
The Resource Management Act needs to explicitly recognise the importance of New Zealanders’ access to more affordable housing... more

National Property Market Analysis

15 Oct 2014 Property
Auckland and Christchurch have recovered from the winter lull that is traditional in real estate, with written sales up and average... more

Migration

Migrants filliing employment gaps

22 Oct 2014 Migration
A stream of migrants has helped plug some of the gaps in New Zealand's steady employment growth. New data reveals migration numbers... more

UK Government: Indefinite Leave to Remain made simple

30 Sep 2014 Migration
There are thousands of expats living in the UK who are aiming for permanent residency status and, eventually, a British passport. But... more

Travel

NZ guest nights flat in August as foreign stays taper off

10 Oct 2014 Travel & Tourism By Paul McBeth
  By Paul McBeth Oct. 10 (BusinessDesk) - New Zealand guest nights were largely flat in August from a month earlier as a gain... more

Business tourism industry applauds Key's vision

6 Oct 2014 NZ Tourism
Conventions & Incentives New Zealand (CINZ) is welcoming news that Prime Minister John Key is to retain his Tourism portfolio... more

Sport

2014 Four Nations: England, Australia, New Zealand and Samoa take centre stage on Saturday

23 Oct 2014 Rugby League
The 2014 Four Nations gets underway on Saturday with England vying with holders Australia, New Zealand and Samoa to take the honours... more

Community Netball Manager appointed to Welsh Netball

23 Oct 2014 Netball
Netball New Zealand Community Netball Manager appointed to Welsh Netball 23 October 2014 Trish Wilcox has been appointed as the... more

Columns

Gordon Campbell: tokenism of NZ‘s role against Islamic State

23 Oct 2014 Opinion By Gordon Campbell
Gordon Campbell on the tokenism of New Zealand‘s role against Islamic State Was John Key born lucky or what? Political... more

Gordon Campbell on New Zealand (again) in other peoples wars

16 Oct 2014 Opinion By Gordon Campbell
  Gordon Campbell on New Zealand getting involved (again) in other peoples wars Apparently, the Key government is still... more

Kiwi Success

Corban honoured by Institute of Directors

17 Oct 2014 Appointments
Institute Of Directors Local businessman Brian Corban was made a Distinguished Fellow of the Institute of Directors yesterday, in a... more

Kiwi Income Property reshuffles executive positions

13 Oct 2014 Appointments
Article - BusinessDesk   Kiwi Income Property reshuffles executive positions By Suze Metherell Oct. 13 (BusinessDesk) - Kiwi... more

Recruitment

Ngati Awa Cast Net Wide In Search For Commercial Leaders

9 Oct 2014 Recruitment
Te Runanga o Ngati Awa is widening its scope in the hunt for directors for the Whakatane based iwi authority’s commercial arm... more

NZ's top pay packet revealed: $4.1m

30 Sep 2014 Recruitment
With a total pay package worth $4.1 million, ANZ New Zealand's David Hisco is the top-paid boss in the Business Herald's executive pay... more