Crafar company signs up for more NZ farmland

23:34, Aug 03 2014
Lochinver Station
PRIME FARMLAND: Lochinver Station.

The Chinese company behind the Crafar farms purchase has signed a deal buy a further 14,000 hectares of prime New Zealand farmland.

Pengxin, the Chinese company that bought the Crafar farms, has signed up to buy Lochinver Station near Taupo.

Conservative Party leader Colin Craig revealed the purchase at a speech to Hasting Greypower yesterday.

The 16 Crafar farms, covering about 8000 hectares in the central North Island, were controversially bought by the Pengxin New Zealand Farm Group in December 2012 and are run by Landcorp. The Crafar farms sold for $200 million and are the largest foreign acquisition of New Zealand land by value.

The 13,800-hectare Lochinver Station, valued at more than $70m, was put up for tender in December last year by the privately owned Stevenson Group, which has owned the property for more than 50 years.

Mark Franklin, chief executive for Stevenson Group, confirmed yesterday a conditional deal had been struck to sell the property to Shanghai Pengxin.


"We've got a conditional sale - one of those conditions is Overseas Investment Office (OIO) approval," he said.

Franklin said normally these deals were confidential, but Craig's speech yesterday meant he needed to give context to the proposed deal.

Craig had said investigators acting for his party had learned of the sale, but the deal was being kept secret so that it would not become an election issue.

Franklin said capital freed up by the farm sale would allow Stevenson Group - which had decided farming was no longer part of its core business - to fast-track its major Drury South development, which would employ up to 8000 people.

"This'll allow us to employ a lot more New Zealand people than the farm, that's for sure," he said.

Shanghai Pengxin confirmed it had signed a Sale and Purchase Agreement.

"The Central Plateau farm acquisition is now before the Overseas Investment Office (OIO) and will then go through the Chinese regulatory approval process prior to settlement," it said in a statement. 

In March, the group secured a 74 per cent stake in 13 farms in the South Island. It said it was "committed to capital improvements and implementing innovative industry concepts".

Gary Romano, chief executive of Pengxin International, denied Craig's suggestion the deal was being intentionally kept quiet until after the election.

"Without wanting to comment directly on Colin Craig, the tender process was really run on the timeline of the vendor. As you'll see, we filed an application to the Overseas Investment Offices before the election, in the normal course of business," he said.

Romano was unwilling to engage with election campaign rhetoric over whether the level of Chinese investment in New Zealand was concerning.

"I would throw the question back: Is the question about Chinese investment, or any foreign investment? I'm not an economist, but I think most economists would say foreign investment is good for New Zealand," he said.

Romano said Pengxin were planning to further invest in Lochinver for environmental, community and productivity upgrades. "It's a benefit for everyone concerned - ourselves, the community and New Zealand," he said.

Talking to media after his speech, Craig said the OIO did not have to disclose details about the potential buyers but the situation was different heading into an election.

"New Zealanders want to know. This is a tremendously important piece of land, it's iconic, we need to know if our country is being sold out from under us."

"They saw what happened with Crafar farms and they don't want a repeat of it."

The OIO confirmed this afternoon it had received an application for the purchase of Lochinver Station, but the details were initially kept secret.

But Overseas Investment Office manager Annelies McClure said in light of the media interest the parties involved had consented to releasing the information. 

"The applicant is Pure 100 Farm Limited - a company that is a wholly-owned subsidiary of Shanghai Pengxin Group Co Limited." 

She said all other details of the application would be withheld however, at least until the office had made decision.

Craig said the Conservative Party would oppose all substantial land sales to foreign business interests.

"We will be changing the criteria of the Overseas Investment Office so that our country is not sold up. It's time to take down the 'For Sale' sign on New Zealand."

Craig played down claims he was scaremongering.

The National Party had "waved through the Crafar farms deal against our national interests and doubtless will do the same with Lochinver Station", Craig said.

"A vote for National this election is a vote to continue selling up our country to foreign business interests. We are standing up for Kiwis who want this country to remain New Zealand-owned." 

Though he said he supported "alternative approaches" such as joint ventures and leasing options, "we can do business without selling our soul".

Craig also fired a shot at Prime Minister John Key for his statements that New Zealanders shouldn't be concerned about Chinese land acquisitions.

Key has previously defended rural property sales, claiming that less than 1 per cent of all farmland has been sold to foreign investors.

NZ First leader Winston Peters has also campaigned strongly against Chinese land purchases.

He said he would campaign has hard as he could to make sure Pengxin didn't purchase any more land in the region. 

"There's an election in just under seven weeks, and depending on the outcome, that statement [from Pengxin] will have some merit or not. 

"But we are not going to be campaigning here to allow that sort of thing to go on in the future."

He called Key's past comments were "statistical nonsense".

"He has no record of the level of sales when it comes to houses or land, and deliberately that is the case because he refuses to keep a register as other countries do. 

"We have a bill in Parliament, and would have such a register to know what's been sold and to whom, and why it's been allowed."

Peters said Key had done his best to keep the public in the dark over land sales to foreign buyers. 

Labour has promised to tighten up the foreign investment regime.