Strong wool eyes China
China looks set to play a key role in helping the New Zealand wool sector shift away from trading as a commodity supplier.
SFF chief executive Dean Hamilton told a recent China Business Summit that Shanghai Maling's investment of $360m in Silver Fern Farms (subject to Overseas Investment Office approval) in return for 50% ownership is a game-changer in a complex market.
"The growing middle class, if they can afford it, will buy imported safe food," he says.
"We aren't about to build a plant in Uruguay or China; they want this product 100% made in NZ. This is a tremendous outcome of this investment in terms of economic development and employment falling into [the NZ] market.
"We're excited that retail-ready [product] packaged in this market will be a significant growth area for us."
Hamilton says Shanghai Maling can bring some real value to the company on several fronts, including access to an inland customer clearance business, which allows them to bypass the port clearance system; and the company knows how to handle chilled product and understands the supply chain.
"Between themselves and Bright they have over 6000 supermarkets. So in trying to get product into a complex part of the end market, there is opportunity to leverage those supermarkets to
put us in a unique position."
"They have a direct-to-home business operating now," Hamilton concluded.
