A Chinese company's $1.5 billion proposal to buy 29 North Island dairy farms previously owned by Crafar family interests and manufacture long-life milk for export has stirred deep fears of foreign investment, says a spokesman for the company involved.&quo
A Chinese company's $1.5 billion proposal to buy 29 North Island dairy farms previously owned by Crafar family interests and manufacture long-life milk for export has stirred deep fears of foreign investment, says a spokesman for the company involved.
"Unfortunately Natural Dairy's interest in the New Zealand dairy industry has met a xenophobic response from some farming interests completely at odds with reality," said company spokesman Bill Ralston.
"This is not a 'Chinese take-over of the New Zealand dairy industry' as some hysterically suggest," he said.
The company planned to buy or, if necessary, build a $30 million factory to produce UHT milk for export, he said.
"New Zealanders, particularly dairy farmers, needed to wake up to the huge economic benefits being offered by Natural Dairy (NZ) Holdings Ltd's plans to invest up to $1.5 billion in the New Zealand dairy industry.
"They must not be deceived by a well-orchestrated public relations campaign by vested interests that are determined to stop this investment."
On April 1, the Overseas Investment Office (OIO) returned Natural Dairy's application to buy the farms and said it had sought more information.
Mr Ralston today said the company was revising its business plan, at the request of the OIO, so as to best illustrate the benefits of its application to purchase the farms.
The aim to produce UHT milk from 20,000 cows in its own herds would provide the nation's first truly vertically integrated company -- not only producing and processing the raw milk, but marketing it as well.
"If the OIO approves this application, the medium-term plans for Natural Dairy are to acquire more dairy farms in the North and South Island and acquire or construct a dairy plant suitable for the manufacture of infant formula," Mr Ralston said.
Such a factory could cost around $100 million. Natural Dairy was currently raising capital of up to $1.5 billion, primarily in Asia.
May Yan Wang, who headed a company purchasing land on behalf of Natural Dairy, was in Asia helping raise further capital and was expected back in NZ in two weeks.
Mr Ralston acknowledged Ms Wang had "had some previous business difficulties" but said these were in the process of being resolved and a proposal would be put to the creditors.
The Sunday Star-Times reported Ms Wang was due to appear in Auckland District Court on April 28 to face charges brought by the Companies Office relating to her management of a group of companies which collapsed into liquidation in 2008. It also said a Hawke's Bay-based credit union had made allegations about non-repayment of a $300,000 debt.
Mr Ralston said Natural Dairy (NZ) Holdings Ltd was a separate entity backed by reputable large scale investors, primarily from Asia, and Ms Wang was only one of three New Zealand directors involved in the project, the others being Sir Ngatata Love and Auckland accountant Keith Rushbrook.
Natural Dairy told the Hong Kong Stock Exchange last month that it had signed a deal to acquire assets including farms, livestock and milkpowder production plants, with the $1.5 billion deal to be settled partly in cash and partly through an issue of convertible bonds.
