increase font size
Yashili’s infant formula plant at Pokeno.
A newly published report by KPMG shows that in the last two years China has been the single biggest offshore investor in the New Zealand dairy sector, placing 28% of the $1.3 billion that came into dairy and milk processing from offshore.
The report, prepared by KPMG with the Overseas Investment Office (OIO), shows that between January 2013 and December 2015 about $3.4 billion was invested in a range of NZ agribusinesses by overseas companies and individuals. This represents 13% of the $26.3b invested in total in NZ in industries including real estate, energy and financials.
While China (28%) was the largest investor in dairying, France (13%) and the US (9%) were also in the mix.
The global head of agri for KPMG, Ian Proudfoot, says while China is a dominant investor in the dairy sector, the US, Canada and Europe also invest heavily in other agri related ventures.
He says though China is now the biggest investor, this may not continue. NZ needs a balanced spread of investors, in particular those who want to create and drive value from their investments here.
Proudfoot acknowledges the concerns NZ has about Chinese investment, notably the influence the state has on investment policy, and the focus of China on food security.
“Part of the concern people have is the businesses the Chinese are buying. Through Yili they have invested in the Oceania Dairy business in the South Island, but that asset would not have been built without Chinese investment. And the Yashili development at Pokeno (south of Auckland) would not have happened without the Chinese investing. They are creating jobs and opportunities for us to produce into higher value product streams.”
Proudfoot says NZ needs partners who are well connected to markets and if a Chinese partner can do this, that is positive.
He also notes Kiwi concern about Chinese owned companies in NZ putting pressure on local ones in the Chinese market.
“I don’t see that as a problem although the nature of the Chinese economy is connection and relationship. Good relationships and strong connections facilitate how you can do business in the Chinese market. So maybe the Chinese-owned companies in NZ have an easier track, but I don’t see them making it difficult for others.”
Proudfoot refers to interesting new statistics about the amount of liquid milk being taken into China. Germany is sending 4L of liquid milk for every 1L NZ sends to China.
“What the Chinese are looking for is high quality dairy products.... They’re going to look to NZ to increase the delivery of this product to them.”
KPMG’s comprehensive report shows that most of the freehold land being bought by overseas investors is in Canterbury, Otago and Southland -- 49% of land sales.
Proudfoot says the positive story from the research is that offshore entities see NZ as a place worth investing in.
The liquidation of failed co-operative Organic Dairy Hub is continuing, and net proceeds will be distributed to farmer shareholders once final tax obligations have been met, according to the liquidators.
A co-operative touted as New Zealand's only 100% farmer-owned organic milk producer has gone bust.
The cost of living crisis is putting even more pressure on farmers to ensure they are delivering what customers want.
The need for world-class biosecurity remains the highest priority for agriculture industry leaders.
More evidence - if it was needed - that farming sector confidence is on the wane, burdened down by increasing red tape and workforce shortages.
Departing Fonterra director Leonie Guiney is urging the next generation of co-operative farmers to step up and be there to lead in future.
A work in progress is how Farmlands chair Rob Hewett describes the rural trader's 2024 annual results.
A net zero pilot dairy farm, set up in Taranaki two years ago to help reduce on-farm emissions, is showing promising results.
Chinese buyers are returning in force to replenish stocks and helping send global dairy prices higher.
New DairyNZ chair Tracy Brown says bipartisan agreement among political parties on emissions pricing and freshwater regulations would greatly help farmers.
Prime Minister Christopher Luxon says the relationship between New Zealand and the US will remain strong and enduring irrespective of changing administrations.
OPINION: Greenpeace tried its best to disrupt Fonterra’s annual meeting at a hotel in New Plymouth earlier this month, but…
OPINION: Call it what you want, a hikoi, a car-koi or a koru-koi, the recent protest march against Act's Treaty…
