Crafar farms just the start for Chinese

Fonterra chairman Henry van der Heyden

Waikato Times | 01/06/2011


The chairman of New Zealand's largest dairy company has issued a warning over foreign ownership of Kiwi land.

Fonterra chairman Sir Henry van der Heyden was responding to the news that the new Chinese bidder for the Crafar dairy farming estate, also wants to invest in Kiwi real estate development, mining and infrastructure if it gets the green light from the Government to make the $200 million-plus purchase.

''For me New Zealand needs to leverage its strategic assets and land and water are our strategic assets, so I'm actually uncomfortable with foreign ownership,'' Sir Henry said. ''That's where our future is so we've got to be very careful.''

The full extent of the aspirations of the Shanghai Pengxin conglomerate are outlined in its Overseas Investment Office (OIO) application, obtained by BusinessDay under the Official Information Act. Pengxin's bid for the 16 Crafar farms that are in receivership falls under new overseas investment rules announced last year that give government ministers the ability to turn down applications on economic interest grounds.

The OIO is expected to report back later this month on the application.

Local developers and farming sector representatives appear divided on the overseas investment issue.

Tainui Group Holdings chief executive Mike Pohio said competition was something the developer encouraged. ''Good luck to them. We'll compete as best we can in the areas that we think we have skill and knowledge and capability.'' Mr Pohio said foreign investment in New Zealand had been collectively agreed as being in the country's economic interest.

''In a competitive sense, it doesn't matter whether it's this company or other companies, we don't want to suppress competitive tensions that provide the end customer with an innovative customer-driven outcome.

''We wouldn't want to discourage that by  . . .  trying to get preferential treatment.'' He said for now Shanghai Pengxin Group's intentions were too broad to concern Tainui Group Holdings. ''In short we've got enough to do ourselves.

We've got the capabilities to do that ourselves and the community benefits from us as a local developer and contributor to the economy, just carrying on as we are.''

Morrinsville dairy farmer Lloyd Downing said he was concerned about large parcels of land being sold off in chunks, such as the Crafer farms, instead of being split up so individuals could make offers.

He said he didn't have a problem with foreign investment in mining because he believed the returns would mostly come back to New Zealand.

But he asked where would such foreign investment end.

''Where does it start and where does it stop? Whether you change the law to make it so you have to be a citizen of New Zealand to buy land, that could be an option.'' As for Shanghai Pengxin Group, ''the horse had already bolted''.

''They've got a big chequebook and there's no stopping them really.'' The company is the second Chinese entity to try to buy the Crafar farms. Hong Kong-based Natural Dairy's application last year was rejected by the Government on the recommendation of the OIO because it failed the ''good character test'' of the Overseas Investment Act.

Original source: Waikato Times

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