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Shanghai Maling to buy SFF stake
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AUTHORITIES in New Zealand yesterday gave the final go-ahead to the country’s biggest meat cooperative to sell a half stake to China’s biggest meat processor.
Minister for Land Information Louise Upston and Associate Minister for Finance Paula Bennett gave the approval of Shanghai Maling’s application to purchase a 50 percent interest in Silver Fern Farms (SFF).
They said in a statement that the decision followed a recommendation from the government’s Overseas Investment Office (OIO) to approve Shanghai Maling’s purchase application.
“We are satisfied that the investment will be of substantial and identifiable benefit to New Zealand, which is the test set out in the (Overseas Investment) Act. The investment will put the company in a better financial position and allow it to increase its exports,” they said. “New Zealand shareholders will continue to have 50 percent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor.”
The OIO had to assess the application for the purchase — valued at NZ$261 million (US$191 million) — as it was an overseas investment in “sensitive land and significant business assets.”
The OIO decision said SFF was the largest livestock processing and marketing entity in New Zealand, and owned around 1,769 hectares of sensitive land.
“SFF has been, and continues to be, operationally constrained by a high level of debt. The investment is expected to result in SFF reducing its debt to nil and having cash reserves. This will allow SFF to invest in and improve the efficiency of its plant network as well as advance its value-added strategy,” it said.
Shanghai Maling would help SFF gain a greater presence in China through assistance with product development, market research, government approvals and access to e-commerce sites and 2,000 retail stores over a period of three years.
“New Zealanders, through the SFF Co-operative, will continue to have significant oversight and participation in the investment. SFF’s existing meat processing operations will remain in New Zealand,” it said.
Shanghai Maling has direct control of 800 supermarket and retail stores.
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