Shanghai firm gets okay to buy NZ dairy farms
Source: Agencies |
April 21, 2012, Saturday
|
Print Edition
Print Edition
A CHINESE investment company yesterday won approval for a second time to buy 16 dairy farms in New Zealand, after a court challenge forced the government to review its original decision in favor of the purchase.
Shanghai Pengxin was given the green light to buy the farms for around NZ$200 million (US$163 million) after officials imposed strict conditions relating to investment in the land and protection of sensitive sites.
New Zealand is the only Western nation to have a free trade agreement with China, its second-biggest export customer behind Australia.
Chinese firms already have significant holdings in New Zealand, but the sale of rural and coastal land to foreign interests is a sensitive issue in a country where agriculture dominates the economy. New Zealand is the world's largest exporter of dairy goods.
"The combined effect of the benefits being delivered to New Zealand as a result of this transaction is substantial," Associate Finance Minister Jonathan Coleman said.
Shanghai Pengxin has said opposition to its purchase of the farms was partly motivated by anti-Chinese sentiment, and has warned refusal could deter other foreign investors.
It has promised to upgrade the farms, train New Zealanders to work on them, invest in a New Zealand processing plant and provide money to market the products in China.
Critics of the sale have questioned what expertise the Chinese group has in farming in New Zealand, where agriculture accounts for around half of economic output.
A rival New Zealand consortium, whose lower bid was rejected, has said it still wants to buy the farms and keep them in New Zealand hands. The rejection of its bid led to the legal challenge.
The farms have been on the market for more than two years after the original owner failed to repay bank loans.
Chinese firms already own New Zealand dairy processor Synlait, and hold key stakes in listed agribusiness PGG Wrightson Ltd and appliance maker F&P Appliances Ltd.
Shanghai Pengxin was given the green light to buy the farms for around NZ$200 million (US$163 million) after officials imposed strict conditions relating to investment in the land and protection of sensitive sites.
New Zealand is the only Western nation to have a free trade agreement with China, its second-biggest export customer behind Australia.
Chinese firms already have significant holdings in New Zealand, but the sale of rural and coastal land to foreign interests is a sensitive issue in a country where agriculture dominates the economy. New Zealand is the world's largest exporter of dairy goods.
"The combined effect of the benefits being delivered to New Zealand as a result of this transaction is substantial," Associate Finance Minister Jonathan Coleman said.
Shanghai Pengxin has said opposition to its purchase of the farms was partly motivated by anti-Chinese sentiment, and has warned refusal could deter other foreign investors.
It has promised to upgrade the farms, train New Zealanders to work on them, invest in a New Zealand processing plant and provide money to market the products in China.
Critics of the sale have questioned what expertise the Chinese group has in farming in New Zealand, where agriculture accounts for around half of economic output.
A rival New Zealand consortium, whose lower bid was rejected, has said it still wants to buy the farms and keep them in New Zealand hands. The rejection of its bid led to the legal challenge.
The farms have been on the market for more than two years after the original owner failed to repay bank loans.
Chinese firms already own New Zealand dairy processor Synlait, and hold key stakes in listed agribusiness PGG Wrightson Ltd and appliance maker F&P Appliances Ltd.
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