Chinese investment into New Zealand dairy industry

Chinese investment into the New Zealand dairy industry

Reports that Hong Kong listed Natural Dairy (NZ) Holdings Limited, maybe moving to buy dairy farm assets and milk powder production plants in New Zealand, is a sign that the gate on the New Zealand-China Free Trade Agreement, swings both ways.

“I think we need to remember that this is a report based upon a notice to the Hong Kong Stock Exchange so there’s a lack of hard information to hand,” says Lachlan McKenzie, Federated Farmers Dairy chairperson.

“This really shows the New Zealand-China Free Trade agreement flows both ways, given New Zealand companies have invested in China. Now we have the Chinese reportedly looking to directly invest in New Zealand.

“If these reports are indeed true, $1.5 billion will represent the largest attempt at direct foreign investment into New Zealand since the Canada Pension Plan Investment Board’s abortive attempt to buy Auckland International Airport Limited.

“We all know that ended in tears when the last Labour Government scuttled the deal, after defining the airport as a ‘strategic asset’. We hear much of ‘reputation’ and ‘brand risk’ associated with agriculture and wonder what the Government will make of this.

“While the ball’s in the Government’s court, assuming this all comes to pass, Federated Farmers wishes to meet with Natural Dairy (NZ) Holdings Limited sooner rather than later, to understand its strategic direction.

“Whatever happens, New Zealand will remain an attractive investment destination so maybe time has come for us to look at a Ministry of Food Production.

“It may also help put a floor under farm prices given that in the three months ending February, just 205 farms were sold. That was down from 276 farm sales in the same three month period in 2009 and 713 for the same quarter in 2008.

“The initiative is with Natural Dairy (NZ) Holdings Limited, as we all try to find out more information about this deal,” Mr McKenzie concluded.

ENDS

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