Natural Dairy contracts Fonterra milk

Natural Dairy contracts Fonterra milk ahead of Crafar deal

by Paul McBeth and Pattrick Smellie

July 6 (BusinessDesk) – The Hong Kong investment group seeking to buy the Crafar family farms says it already has contracts in place to buy Fonterra milk and manufacture UHT milk for export through a Tauranga-based processor. Natural Dairy (NZ) Holdings also announced today that it has finally lodged an application with the Overseas Investment Office to buy the Crafar family farms.

Receivers for the Crafar family empire, Korda Mentha, are due to announce a preferred buyer tomorrow, with at least one rival bid coming from state-owned farmer Landcorp.

While Landcorp says its bid is likely to be lower than NDNZ's, it has the advantage of not requiring OIO approval, which is inevitably some months away for NDNZ, assuming it is granted at all.

The diversified Hong Kong investor lodged the application after its New Zealand subsidiary, UBNZ Assets Holdings, made an unsuccessful bid in the High Court to skirt around OIO to buy the farms, a decision which has been appealed.

Natural Dairy vice chairman Graham Chin released details about how the company will operate in New Zealand, saying the manufacturing agreement for 150 million packs of UHT milk that has previously been announced will be supplied by Fonterra Cooperative Group, and processed in Tauranga.

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