Carter Holt Harvey, owned by New Zealand's richest man Graeme Hart, has received Overseas Investment Office (OIO) consent to sell more than 17,000 hectares of Central North Island forestry blocks to a United States led group for an undisclosed sum.
In its decision granting consent for the deal to go ahead, the OIO says the applicant - Te Waihou Plantations Ltd - plans to nurture, enhance and develop the forestry estate as a sustainable high performing business.
Te Waihou's ownership is splintered between 10 countries led by 34.8% ownership from the US, 22.1% from Saudi Arabia, 12.4% from Denmark and 12.4% from Liechtenstein.
The OIO says as the existing trees are harvested under forestry rights held by a third party, the land will be returned progressively to Te Waihou. It will replant the land with trees in demand from Hart's Kinleith pulp and paper mill and other customers.
"The overseas investment will create economic benefits for New Zealand and enhance the Central North Island forest industry and the New Zealand forestry sector," the OIO says.
Companies Office records list three US-based directors for Te Waihou and no shareholders.
Hart bought Carter Holt for NZ$3.3 billion in 2006 and now runs a global packaging business through Reynolds Group Holdings. According to Forbes magazine, Hart is worth US$5.5 billion.
63 Comments
How about for starters 29 large dairy farms in the central north island producing gallons of milk at $8/kg/ms for Sir Henry and the boys to export to the world, not to mention the cost of developing said farms and the continued growth in production..give that man a knighthood.
So he decided to convert them, build them and run them?
Or was that decided before he arrived?
And how much money have they actually made? They geared to heck and on marginal land.
He seems pretty keen to sell them. But there's no buyers at the price he wants...
Could it be he actually destroyed value by carrying on with that plan?
cheers
Bernard
Not at all that area is really coming on as dairy land and in the words of one south waikato dairy farmer i talked to recently said "this area is now as good as matamata", which is true for the longer farmed properties. So long as dairy returns hang in there most of that ex forestry land will work as hard for NZ as any other..so good on him for instigating the transformation...and i was only kidding about the knighthood
Bernard : Do we witness Graeme Hart as a " show pony " ....... at the Ellerslie races with an armful of stunning young female " ambassadors " ? ......... does the guy throw $ Million parties in his honour in Turkey or Fiji ? ......... seen him doing " low-ball " offers to sucker-in gullible shareholders ? .......... has he used idiot celebrities to front a campaign to offer unsustainably high interest rates to " Mum & Dad " investors ?
....... GH is the epitome of the quiet achiever .... And he's the richest person in all of Australasia ..... A true " self-made-man " ..........
Wotsa problem with that , big guy ?
Gummy
You're quite right that he keeps a lower profile and hasn't suckered the public in to investing their money with him.
He stays private and tries to avoid being public whenever he can.
I'm definitely not comparing him to the Mark Hotchins and Rod Petricevics of this world.
I'm just questioning the methods for gathering that wealth and asking who actually benefits.
Has he created a great new invention?
Has he built a new company?
He has convinced bankers to lend him a lot of money and has bought and sold assets, often after stripping out costs and employees. He has very cleverly ridden the interest rate cycle and skipped through a few crises by the skin of his teeth.
Good luck to him. He was taking risk with his money and was more skilled/lucky than the other highly leveraged private equity types who do this sort of thing.
Fair enough.
But have a chat to those around Fonterra and Carter Holt and ask how much long term good he actually did for those assets. He cuts head office and marketing costs. He sells underperforming assets.
But are those assets now operating more efficiently?
Has he innovated? Has he improved productivity?
Where has the wealth he has created gone? To his employees? To his shareholders? To his bankers?
Or just to him?
Is that a sustainable model for capitalism.
I'm beginning to have my doubts.
cheers
Bernard
Where is the decree that one must innovate or in some way act as a benefactor to society ?
........ Warren Buffett doesn't innovate ........ he potters along quietly , admittedly with a publicly listed vehicle , Berkshire Hathaway .
Whom does Hart disadvantage by his business dealings ? ........ Where does he cross the line into illegalities ? .........
........ Offer the guy a coffee , do a double-shot interview , if he's willing !
Gummy
You're right. There's no decree on either being nice or being an innovator.
But I ask again. Is it sustainable and fair for someone to be personally worth billions without having created much of value?
This is part of the problem with the American style investment banker led type of capitalism that now dominates in our globalised economy. The already-rich and connected use unregulated leverage to transfer wealth from the masses to their top 1%.
Graeme Hart is our top 1% of the top 1% of the top 1% and has more wealth personally than our bottom 10% (at least).
How long before the masses revolt?
That's the sort of thing I'm getting at.
I'm not accusing him of dishonesty or any of the shonky dealings of the finance companies.
I've asked him and Rank for interviews many times.
He very rarely does interviews and then only on his terms.
He believes he doesn't have to be accountable to anyone.
Fair enough. This forestry sale only came out because the OIO had to announce it.
He doesn't bother with the public.
This is a symptom, I think, of the disconnection of many in this global elite from their own countries and communities. Eventually they begin to ask if they can do without the rest of us. They refuse to pay taxes. They live in havens. There's even some who would like to create stateless places to live where there is no one they have to be accountable to. Peter Thiel, for example (the investor behind facebook and xero and pacific fibre) wants to create a 'Waterworld' type state on the high seas for the rich to live in.
Have a read of this piece in The Atlantic to get my drift.
http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new…
We don't have many members of this global elite. Graham Hart is definitely one of them.
cheers
Bernard
Bernard : As to Graeme Hart not being an innovator , Tegel were working with several poultry farmers in the Templeton area , in combination with CSIRO in Australia , to utilize DNA extracted from a mutated ( dead ) 4 legged chicken , to produce an entirely new species of chicken for culinary purposes .
.......... No doubt Hart wasn't personally driving this project , but it does come from within his corporation .
Bernard - How long before the masses revolt?
You mean the masses of lazy arses sitting on couches, how long before they revolt and and get a job and earn their own money too... dunno, hard to say but i know some of them are already revolting...
President of Property
I think ...Bernard before you go jumping on Harts credibility as a citizen who should somehow profer an apology to wider N.Z.....for being extremely successful at 'what he does" without an overt sense of benevolence (which is usually rooted in guilt and justification).....you should as a good research journo pop back a wee way and call to account the Faye ..Richwhites who after all really set the tone for what it means to be above accountability.
I've said in early threads I find you to be on occassion Quixotic by nature........where conclusions should be your priority..................AKA ...crafar.
Probably no tax. Probably less wages and salaries (to the workers) than what was started with. Undervalued by who's viewpoint - the greedy at the top that want more?
I agree with you Bernard. The balance has gone. Your website is a great benefit to society - it provides information enabling people to think more about the big picture, to see how out of control financial capitalism has become and the consequences on society. Those that don't like it don't have to read it. They are only holding on to fear of some sort.
http://www.converge.org.nz/pirm/money.htm - Money as a Social Disease
"Corporate managers are forced into a short-term view even in regard to their own operations. They cut investments on research and employee training essential to the corporation's future prospects. As they downsize and close plants in denial of any responsibilities to once loyal and productive employees the sharp employee quickly learns to use the job only to build a resume to attract the attention of a higher bidder. These actions erode the corporation's own human, intellectual, social, and physical capital.
Intent on making ever more money for the money people - even at the cost of depleting the natural, human, institutional, and social capital on which the very survival of society depends - the money system becomes like a cancer that consumes its host and ultimately destroys itself.
The CEO of a publicly owned corporation who fails to maximise profits because of a moral aversion to engaging in such predatory practices is almost certain to be eliminated by the system, even though he - they are almost all men - runs an otherwise profitable operation. Where the shareholders don't step in, a corporate raider most surely will.
The Pacific Lumber Company for years pioneered the development of sustainable logging practices on its substantial holdings of ancient redwood timber stands in California. It also provided generous benefits to its employees, fully funded its pension fund, and maintained a no layoffs policy during downturns in the timber market. This made it a good citizen. It also made it a prime take-over target. Corporate raider Charles Hurwitz gained control in a hostile take-over. He immediately doubled the cutting rate of the company's holding of thousand-year-old trees, tearing a mile and a half corridor into the middle of the forest that he jeeringly named "Our wildlife-biologist study trail". He then drained $55 million from the company's $93 million pension fund and invested the remaining $38 million in annuities of the Executive Life Insurance Company - which had financed the junk bonds used to make the purchase and subsequently failed. This stand of redwoods is now the subject of a last ditch effort by environmentalists to save it from clear cutting.
Professional buy-out artists are drawn like bees to honey by a socially responsible firm that internalises its environmental costs, pays union wages, invests in worker training, fully funds its pension fund, and pays its full share of taxes. To the serious money person these are inefficiencies to be eliminated"
What does our country produce/manufacture that isn't owned by foreigners? How many of our corporates haven't shifted manufacturing to China, etc? Our forests, farms, food producers (Tegel) may be necessities but what benefit when they're owned by foreigners? Is New Zealand even capable of manufacturing any of the products made overseas?
Sorry, your right i wasn't referring to the CHH farms or any other ex forestry land, but the south waikato area in general. Yes your totally right it will that decades, 10-15 yr at least, for this type of country can be considered 'sustainable dairy land', but it will get there.
You really don't like the IMF do you Iain:) I have to agree about the stripping of assets we own.
Hopefully we will line up behind Portugal, Greece and Ireland in telling them to shove it up their proverbial.
Like your public credit or bust article by the way. Have sent the link to people I know that will get it.
I can see both sides of the argument here. Graeme Hart is a very clever businessman who can take bloated organisations, carve them up and sell individual pieces for what he paid for them in total. Banks (and other investors?) see that talent and are prepared to loan him lots of money to make highly leveraged buy-outs.
However, the lack of communication must make working for a Rank Group owned company very uncertain and frustrating.
Also, its an amazingly high risk game because of the high leverage. If one of his deals turns sour it could cause the whole empire come crashing down under mountains of debt. I'm amazed the banks are prepared to fund this. It's probably because the debt is collaterised and the risk is "theoretically" spread over multiple parties.
Clever business people and my “money heroes” are the ones, who distribute most of their money back into the communities, paying decent salaries, supporting charities, education, culture, sports, environment, etc.
Who bloody needs millions ? – especially in today’s world - just the greedy.
Sustainable redistribution of money by millionairs/ billionairs back to societies would make a far better world.
..and why pursue the stupid goal to become a millionaire - should not be supported and admired anyway under the current worldwide circumstances.
Nor should it; consider the case of the Scottish oranges. It would be very hard work and take a lot of resources (energy for heating, glass for greenhouses) to get oranges to grow in Scotland. But that does not mean it is reasonable to expect people to pay a lot of money for marmalade made from oranges grown in Scotland, when they can pay less money for equally good marmalade made from oranges grown with less effort and resource use in Spain.
In other words, it's not about the amount of inputs (of which labour is one); it's about the intelligence with which they are directed towards whatever is the most effective use of them.
I wouldn't make that sort of money for playing football, but David Beckham does. That's because lots of people are willing to pay money to see him do it, whereas they are not willing to pay money to see me do it.
Who then do you think should receive the money that all those people are willing to pay for the difference between watching me play football and watching David Beckham play football?
That's what it is about - what people are and are not willing to pay money for. And that, as long as it doesn't harm others, is nobody's business but their own.
Exact MdM - your comment (last sentence) reflects the general thinking of societies, but without the understanding and/ or accepting the consequence - why we are as a nation/ society getting poorer and poorer.
So – in other words the “Greedy Money Rich” are creating increasingly a problem draining the middle class and as a consequence prevent an economic recovery.
Below a classical example:
http://www.larouchepub.com/other/2004/3103waltons.html
http://www.moneyvsdebt.com/2007/01/18/wal-mart-is-killing-off-the-american-economy/
The only thing that disappoints me about Graeme hart is that because of his low profile, he doesn't share his knowledge and skills with the rest of us. It would be good if he could at least donate a little bit of his time by communicating with the public to help improve NZ in terms of building wealth and productivity.
I think Warren Buffet does a better job in this area.
VL : Where did you get those figures from ?
....... Forbes 2009 survey places Graeme Hart as the 110'th richest individual in the world . They calculated his assets ( net of debts ) as $US 6.1 billion then .......
Hartly any wonder that Bernard and the " Tall Poppy " cutters are slagging him off ! ...
.... Quiet ....Unassuming ... Accepting massive personal risk .... Plotting his own path .....Excruitiatingly successful ... Low profile .... No political donations ......
...... Bloody sod , ain't he !
Walter...........don't confuse objective observation with admiration or envy.....i'm fairly sure I would opt to keep my life than trade places with someone such as HART.....but I'm not going to vilify the man because he ...has money to excess(risk based) or he has not profered himself as the savior of our economy.
Steven Tindall does much behind the scenes in regard to charity and the like........... oddly enough some people would still like to see him take a knock.
Christov – I’m not talking about GH – I don’t know him. I’m just writing because I’m concerned about the destruction of the world because of greed, quite often caused by millionaires/ billionaires.
In today’s world and the way we are going to be a millionaire + just doesn’t make sense anymore.
I can see some making millions investing in highly sustainable inventions, but I’m sure these people are reinvesting all the time in new environmental friendly new adventures, which is fine with me. We normally don’t hear from them – maybe their products.
I don't think Bernard is criticising the guy for being rich and successful - read his comments in full. The debate I believe Bernard was starting is on the method used to become rich and successful and the social impact of capitalism morphing into whatever it is now.
Maybe the debate could've been on the actual transaction itself. How much more efficient can growing trees become? Or is it just another group of people chasing returns? Have they bought in at the top of the market? What benefit to New Zealand selling to foreigners - the profits will not stay in NZ and the OIO are idiots - "The overseas investment will create economic benefits for New Zealand and enhance the Central North Island forest industry and the New Zealand forestry sector," . WTF!
tall poppy syndrome a perceived tendency to discredit or disparage those who have achieved notable wealth or prominence in public life; with allusion to the idea of the poppy as a flower whose showy appearance does not represent real worth.
Tall poppy seems apt - has achieved notable wealth or prominence through actions that provide no real worth/value to society as a whole.
No one around here Kunst admires GH for being rich, i doubt whether he himself does, i bet he's one hell of a chess player tho. I visit this site cause i like following the great debates and debating/thinking skills of the participants, not one of my strong points eh, But GH would have to be one of NZs finessed thinkers, if money was the objective he'd have it all stashed under his pellow like buffet/gates but he doesn't, he leverages back up to the hilt and goes again, borrowing from any institution he wishes,and they'l take his business not cause he's rich, but cause of his competence.
Its' Friday yay....yay ....yay..!!! and you know what that means ...don't you ya young scamps...
in keeping with todays thread of popularity ..I'll dedicate this to getting old and confused and wondering what the F%#k we were talking about in the first instance.....and so
Couple in their nineties are both having problems remembering things. During a checkup, the doctor tells them that they're physically okay, but they might want to start writing things down to help them remember ..
Later that night, while watching TV, the old man gets up from his chair. 'Want anything while I'm in the kitchen?' he asks.
'Will you get me a bowl of ice cream?'
'Sure..'
'Don't you think you should write it down so you can remember it?' she asks.
'No, I can remember it.'
'Well, I'd like some strawberries on top, too. Maybe you should write it down, so not to forget it?'
He says, 'I can remember that. You want a bowl of ice cream with strawberries.'
'I'd also like whipped cream. I'm certain you'll forget that, write it down?' she asks.
Irritated, he says, 'I don't need to write it down, I can remember it! Ice cream with strawberries and whipped cream - I got it, for goodness sake!'
Then he toddles into the kitchen. After about 20 minutes, The old man returns from the kitchen and hands his wife a plate of bacon and eggs. She stares at the plate for a moment.
'Where's my toast ?'
The other day I went for a walk to check out the new board walk across Orakei basin during a day I had off. To get there I walked through the state housing area in Meadowbank. I don’t think there would be a single state house there that wasn’t worth at least $550,000, and that would be just the value of the land! Some of the state houses which overlook the basin and have views out towards the Waitemata harbour and the CBD are probably worth well over 1 million.
A number of these houses have been sold over the last 10 years or so to private buyers, and it’s amazing to see what they have done with them in terms of renovation, additions, fencing, landscaping etc. Some of them are looking really good. Because of that work it was quite easy to distinguish between a former now privately owned state house and one that was still owned by the Housing Corp. With time one can see how this whole state housing area is slowly becoming gentrified.
As I walked through I observed something that was of great interest to me.
All the privately owned houses, nobody appeared to be home. The windows were shut, I couldn’t see any cars in the driveway and I didn’t see anybody outside around the property. Given that this was around 3pm on a Monday afternoon, I assumed that the occupants were at work.
In the adjacent state houses however, all the people were at home. The windows were open, cars were in the driveway, and sometimes you could even see the people sitting outside enjoying the sun.
And I thought to myself why should you be able to sit in a valuable state property paid for out of our taxes in the middle of a work day doing absolutely NOTHING while no doubt also collecting a welfare benefit, while your neighbours are at work slogging their guts out to pay for the responsibility that they have taken on by buying these rundown properties in the first place and improving them? One group is contributing to society, paying taxes and improving their communities, while the other group is doing absolutely nothing other than bludging.
Have indigent bludgers ever created jobs, invented anything, or established a company? Who is paying for them to sit at home in the sun all day, in a valuable house they don’t own collecting a benefit they pay no tax for while driving clapped out old cars on already clogged roads to go and visit their mates who are doing exactly the same thing?
Bernard when you condemn the bludging poor of this country with the same vigour and force as you do the Graeme Heart’s of it, then you might get some traction in the credibility stakes with your comments. But until then………………..
... .Hello DB : Grand to have you back amongst the fray , attempting to keep Hickey on his toes .......
.Just got back from a jaunt to Tasmania ......... And truth be told , when an island of bucolic 1830's villages appears to have more zip / zoom / & ka-powie than good olde NZ , you know we got issues !
Poor old Graeme Hart , huh ...... Self-made man , beholding only to some international banks ...... Quietly risking only his and their munny ...... And Bernard lets rip at the guy . No government guarantees . No political " donations " ........ GH just plods along , unassumedly creating his billions , so Hickey slams the dude .
........ What is itching your butt , big guy ?
As off -topic as you Chistov ...but as you say its Friday.
Two old ladies are out driving. The one in the passenger seat notices that her friend has run a red light. She decides not to say anything as there was no near miss.
However the same thing happened again and this time she decides that if it happens one more time she will say something as she is getting nervous.
Sure enough, her friend runs a third red light.
"Mildred! What on earth are you doing..that's three red lights you have gone through.
Do you want to kill us?
"Oh shit" says Mildred "am I driving?"
Ok Bernard, give us your example of the perfect modern day Kiwi capitalist, the person who ticks all the box's for you....see, i keep sratching my head wondering who it might be but can't for the life of me come up with a name.....plz don't keep us waiting long..cheers
Brilliant ! ......... Got an answer to that , Bernard ?
........ Sam & Gareth Morgan ? ...... Sold out TradeMe , 100 % to the Aussies , Fairfax ......no ! ,
........ Owen Glenn ? ......... Helen Clark's benefactor , no !
........ Bob Jones .... no . Olly Newland ... no . John Key ....... aha ha de haaaaaaaaaaa !
C'mon , Bernard , we're awaiting your example of the perfect modern day Kiwi capitalist !
GBh.....The Morgan's have put a lot back into NZ and Overseas.
Sam has become a social investor www.jasmine.org.nz
GH, as far as I know, is not taking that approach.
And Bernard is correct: the Hart model is entirely based on extreme leverage and crushing costs out of businesses. If his purpose is simply bigger and bigger deals, then it is highly likely he will over stretch at some point and lose it all.
Or perhaps he will be like Buffet and Gates and give it all away in his later years. Who knows?
But the leveraged finance model is on its last legs. We went through this in the 70s and 80s...it's a model based on ponzi principles.....as the buyers of Yellow Pages found out recently.
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