Shanghai Pengxin aims to double its NZ farm assets

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Chinese businessman Jiang Zhaobai chats with Queenstown Lakes, New Zealand Mayor Vanessa van Uden
BusinessDesk | 19 February 2015

Shanghai Pengxin aims to double its NZ farm assets

The New Zealand farm group arm of the Shanghai Pengxin Group owned by Chinese billionaire Jiang Zhoabai says it plans to double its $500 million of local assets within the next five years.

Chief executive Andy Macleod said the group had kept a low profile since its controversial 2012 purchase of the former Crafar Farms for $200 million, which was the largest-ever foreign acquisition of New Zealand land by value.

"We've wanted to get some runs on the board and we are a private company," he told farmers at a Federated Farmers dairy conference in Taupo yesterday.

"We are 100 percent Chinese owned and do get in the limelight because of that."

Macleod said the group was hunting for more farms because it wanted to have scale.

"We have $500 million in assets under ownership and have a directive from the chairman to look at doubling that exposure within New Zealand. We have 26 farms at the moment and are looking for plus 50-odd farms," he said.

In addition to the 13 Northland dairy farms and three support farms it bought in the Crafar deal, the group also has 13 dairy farms totalling 3942 hectares in the South Island after taking a 74% stake in Synlait Farms in a $85.7 million joint venture with its chief executive Juliet Maclean and director John Penno in late 2013.

Macleod said the group is awaiting Overseas Investment Office approval to buy the 13,843 hectare Lochinver Station near Taupo through its subsidiary, Pure 100 Farm. The sheep and beef farm is reportedly worth about $70 million, and would be the second-biggest acquisition of farmland by a foreign buyer.

The group wants to establish a dairy unit on the station on a part of the land that backs on to one of the former Crafar Farms. All 20 staff have been assured they would keep their jobs under the new ownership if approved.

And it also has sales and purchase agreements in place to buy an undisclosed number of farms valued at $70 million in Northland and another farm at Taharoa next door to one of its existing properties.

The New Zealand dairy team had been scouting for farms for the Chinese group to purchase in Australia and South Africa, Macleod said.

Set up in 1997 as a commercial property developer, Shanghai Pengxin began diversifying into agricultural assets in 2005. According to the website of its Milk New Zealand subsidiary, it now controls more than 12,000 hectares of land in South America, Cambodia and China, farming wheat, corn, soybeans and sheep.
Original source: BusinessDesk
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