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

2017 Budget to be presented on 25 May

8 Feb 2017 Financial
7 Feb 2017 The Government's 2017 Budget will be delivered on Thursday 25 May, and will be centred on providing opportunities for all... more

Conservation efforts underway on Scott Statue

6 Feb 2017 Environment
9 Feb 2017 A hundred years on from its unveiling, conservation efforts are underway to repair and reinstate the white marble statue of... more

Business

Finance Minister requests cost-benefit analysis on DTIs

8 Feb 2017 Business News
8 Feb 2017 A full cost-benefit analysis on Debt-to-Income (DTI) limits and public consultation will be conducted by the Reserve Bank... more

Korean FTA delivers new round of tariff cuts

18 Jan 2017 Business News
8 JANUARY, 2017More local businesses looking to expand into Korea will benefit from the latest round of tariff reductions under the... more

Living

3rd Position, Louis Vuitton America’s Cup World Series

21 Nov 2016 Lifestyle
Emirates Team New Zealand EMIRATES TEAM NEW ZEALAND CLOSES IN 3rd POSITION THE LOUIS VUITTON AMERICA’S CUP WORLD SERIES more

Arts Foundation Award recipients for 2016

14 Nov 2016 Lifestyle
The Arts Foundation Next generation of internationally acclaimed talent among the Arts Foundation Award recipients for 2016Under ... more

Property

NZ house prices gain 11% in October

14 Nov 2016 Property
Article - BusinessDesk Monday 14 November 2016 10:28 AM NZ house prices gain 11% in October, driven by sales of higher value homes By... more

RBNZ sees pressures building in Auckland construction sector

11 Nov 2016 Property By Paul McBeth
Article - BusinessDesk Thursday 10 November 2016 04:04 PM RBNZ sees pressures building in Auckland construction sector By Paul ... more

Migration

Recognised Seasonal Employers employ more Kiwis

8 Feb 2017 Migration
7 Feb 2017 Immigration Minister Michael Woodhouse welcomes a report showing the vast majority of employers who take on seasonal... more

Good progress on investment attraction strategy

8 Dec 2016 Migration
Economic Development Minister Steven Joyce has welcomed news that New Zealand is attracting a higher level of quality international... more

Travel

Weirdest things visitors Google before coming

6 Feb 2017 NZ Tourism
8 Feb 2017 Does New Zealand celebrate halloween?  Is Auckland a dangerous town- these are some of the subjects visitors Google... more

New campaign to get more Aussies to Northland

30 Jan 2017 Travel & Tourism
30 January 2017 A new marketing campaign starting this week to attract Australians to Northland is an excellent approach to... more

Sport

Silver Ferns wrap up Quad Series with big win

6 Feb 2017 Netball
6 Feb 2017 The Silver Ferns finished runners-up in the Netball Quad Series after completing a well-crafted 70-39 win over the SPAR... more

Silver Ferns bounce back against England February 3, 2017

3 Feb 2017 Netball
The Silver Ferns completed a dominant outing to post a 61-37 win against the England Roses in their second match of the 2017 Netball... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the Gareth Morgan crusade First published on Werewolf more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome more

Kiwi Success

Spencer to be Acting Governor of Reserve Bank

8 Feb 2017 Appointments
7 Feb 2017 Finance Minister Steven Joyce will appoint current Deputy Reserve Bank Governor Grant Spencer as the Acting Governor of... more

Temporary Chairs appointed to Canterbury and South Canterbury DHB

1 Feb 2017 Appointments
30 January 2017 Health Minister Jonathan Coleman has today appointed temporary Chairs to the boards of Canterbury and South... more

Recruitment

Record number of people in employment

1 Feb 2017 Recruitment
1 Feb 2017 Tertiary Education, Skills and Employment Minister Paul Goldsmith has welcomed the record number of New Zealanders now in... more

NZ Government accepts recommendations on pay equity

8 Dec 2016 Recruitment
Hon. Paula Bennett,  Hon. Michael Woodhouse, Hon. Louise Upston 24 November, 2016 The Government will update the Equa... more

s