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

Business leaders join international cyber security line-up

28 Apr 2016 News
New Zealand Government Hon Amy AdamsMinister for Communications 28 April 2016 More than 200 top business people will join... more

ANZAC 2016: 100th Commemoration

25 Apr 2016 News
The Ode of Rememberance  They went with songs to the battle, they were young.Straight of limb, true of eye, steady and aglow.They... more

Business

Landmark EQC settlement

28 Apr 2016 Business News
Article - BusinessDesk Landmark EQC settlement agrees it must repair homes to 'when new' state By Sophie Boot April 28 ... more

US underwear giant Hanes seeks Pacific Brands

28 Apr 2016 Business News
Article - BusinessDesk Thursday 28 April 2016 11:39 AM US underwear giant Hanes seeks Pacific Brands in A$1.1 bln offer By Jonathan ... more

Living

100 Years On – ANZAC Day commemorated where it first started, in London

25 Apr 2016 ANZAC By Charlotte Everett
You could be forgiven for assuming that the first ever ANZAC Day was commemorated in Australia or New Zealand. In fact, it was on this... more

Short Film Festival to Celebrate Canterbury

24 Mar 2016 Lifestyle
Canterbury Shorts   24 March 2016 Short Film Festival to Celebrate Canterbury Christchurch – A one-night only Canterbury... more

Property

KiwiSaver home buyer support tweaked

28 Apr 2016 Property
New Zealand Government Hon Dr Nick Smith Minister for Building and Housing 28 April 2016  Changes to KiwiSaver withdrawal rules... more

House-sharing aims to get Aucklanders on property ladder

27 Apr 2016 Property
Article - BusinessDesk House-sharing offer aims to get Aucklanders on property ladder By Fiona Rotherham April 27 (BusinessDesk) -... more

Migration

Kiwis could be affected by tighter UK rules

30 Mar 2016 Migration By Audrey Young
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more

Immigrants' attitudes to corruption worries SFO

17 Feb 2016 Migration By Sophie Boot
Feb. 17 (BusinessDesk) - New Zealand's record inbound migration has undermined the country's squeaky-clean reputation because of an... more

Travel

Air New Zealand to revenue share with United in NZ-US routes

11 Mar 2016 Travel & Tourism
Article - BusinessDesk   Air New Zealand to revenue share with United in NZ-US routes By Paul McBeth March 11 (BusinessDesk) -... more

First Dubai - Auckland flights take off

2 Mar 2016 NZ Tourism
New Zealand Government   Hon Simon Bridges Minister of Transport 2 March 2016 First Dubai - Auckland flights take off The start... more

Sport

Sleepless Nights for Ferns Selectors

28 Apr 2016 Rugby League
New Zealand Rugby League Thursday, April 28, 2016Sleepless Nights for Ferns Selectors   Akarana second row Annetta Nuuausala is ... more

NZL takes early lead in three events at Sailing World Cup

28 Apr 2016 Sailing
Yachting New Nealand NZL takes early lead in three events at Sailing World Cup Hyeres The NZL Sailing Team has made a strong start... more

Columns

Gordon Campbell on Trump and the Madman Theory

28 Apr 2016 Opinion By Gordon Campbell
Gordon Campbell on Trump and the Madman Theory Years ago, Richard Nixon explained to his chief adviser Bob Haldeman what has since... more

Gordon Campbell on Kiwirail’s latest stint in the dogbox

27 Apr 2016 Opinion By Gordon Campbell
Gordon Campbell on Kiwirail’s latest stint in the dogbox The denigration of Kiwirail continues. The latest review (based on a ... more

Kiwi Success

University of Otago appoints next Dean of Pharmacy

28 Apr 2016 Appointments
University of Otago University of Otago appoints next Dean of Pharmacy A leading researcher from Canada has been appointed as the... more

Network for Learning board reappointment

27 Apr 2016 Appointments
New Zealand Government Hon Nikki KayeAssociate Minister of Education 27 April 2016 Media Statement Network for Learning board... more

Recruitment

Zero-hour contracts gone, PPL extended

10 Mar 2016 Recruitment
New Zealand Government Hon Michael Woodhouse Minister for Workplace Relations and Safety 10 March 2016 Zero-hour contracts gone, PPL... more

Scheme helping to staff hard to fill positions

28 Feb 2016 Recruitment
New Zealand Government Scheme helping to staff hard to fill positions Health Minister Jonathan Coleman says an incentive scheme... more