Chinese eye dairy assets

Fonterra chief executive Andrew Ferrier doubts there is an economic case for Chinese looking to invest in the dairy industry to buy their own processing plants in this country. Chinese-owned Natural Dairy (NZ) Holdings told the Hong Kong stock exchange yesterday it had entered into an agreement to buy assets, including land, livestock and milk powder production plants in this country for $1.5 billion reports Stuff. Mr Ferrier today said the possibility that Chinese investment in this country could compete with Fonterra would depend on whether they wanted to put in their own processing assets, or whether they wanted to run their milk through Fonterra. He doubted there was an economic case for them to buy their own processing plants in this country, with the Fonterra system far more efficient than anyone could replicate. "Our government does have to be aware of the fact that there should be extensive foreign interest over time in investing in New Zealand farms, and we've got to think of this from a policy perspective."Mr Ferrier also said Fonterra was building farms in China, because the Chinese were asking it to do that. "We're putting in farms to supply safe, healthy milk to our customers in China which complements the New Zealand milk that we're shipping to them." The proposed purchase included the Crafar family's 22 dairy farms, put into receivership last October. Receiver Michael Stiassny, of KordaMentha said his office was dealing with Chinese interests around Natural Dairy to see if they could conclude a transaction.There was no doubt that under the current political environment the OIO was operating at a far quicker pace than under previous administrations, Mr Stiassny said. "I have to make sure that if I sell the business to someone they have the money... and we're taking steps to ensure that if we enter into it and they get possession, the secured creditors will get their money."