Chinese investors in Hong Kong look to buy New Zealand dairy farms for $1.1 billionBy AP
Wednesday, March 24, 2010
Chinese investors eye New Zealand’s dairy sector
WELLINGTON, New Zealand — A Hong Kong-based investment group says it wants to invest up to New Zealand dollars 1.5 billion ($1.1 billion) in New Zealand’s dairy industry to make high-quality infant formula and long-life milk products for the Chinese market.
The move comes two years after China’s 2008 tainted milk scandal that left six children dead and more than 300,000 sickened when dairy suppliers added the industrial chemical melamine to milk to boost its apparent protein content. More than 20 dairy companies were closed by authorities and two men were executed for their part in the scam.
Natural Dairy (NZ) Holdings Ltd., formerly China Jin Hui Mining Corp. Ltd., has already struck a deal to buy four New Zealand farms and is negotiating with Crafar Farms, which is in receivership, for 24 others, said Kerry Knight, a lawyer acting for Natural Dairy.
Natural Dairy has raised $105 million in initial capital, and said its total investment in New Zealand could reach $1.1 billion for “farms, livestock and milk powder production plants.”
Michael Stiassny of KordaMentha, the receiver for the 24 Crafar farms, confirmed the Chinese offer.
“It’s an attractive offer for us and we’re doing what we can to bring it to a conclusion,” Stiassny told National Radio.
Any deals need New Zealand Overseas Investment Office approval.
Knight said Natural Dairy wants an integrated farm-to-market system and was not interested in buying New Zealand milk powder and packaging it for Chinese consumers.
“What they want to do is control the entire process … from the farm gate to the consumer’s mouth,” he told National Radio. “That’s their marketing edge in China, so they can promote the fact they’re covering every stage of production.”
“They have looked at this as a long-term opportunity that will grow and grow and grow as the demand for milk products obviously grows in China,” he said.
Tags: Asia, Australia And Oceania, China, East Asia, Greater China, Hong Kong, New Zealand, Wellington