Crafar farms deal passes final hurdle

ANDREA FOX
Last updated 07:51 18/10/2012

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Chinese company Shanghai Pengxin hopes to settle its purchase of the 16 central North Island Crafar farms before early December, after the Supreme Court threw out the last obstacle to the deal, an appeal by Maori trusts.

Pengxin, preferred bidder of KordaMentha, receivers for the dairy farming estate, has had to wait through 18 months of legal challenges and protests against the purchase.

That process ended yesterday when the court refused to allow a further legal appeal by central North Island iwi.

Tiroa E and Te Hape B Trusts, which have been negotiating unsuccessfully to buy two of the Crafar farms at Benneydale, considered ancestral land, had asked the Supreme Court for leave to appeal Pengxin's purchase consents by the Overseas Investment Office and the Government, upheld by the High Court and Court of Appeal.

A statement from Pengxin said the purchase of the nearly 8000 hectares of farms had been "an unbelievably protracted process" but that it had never considered giving up.

It looked forward to a positive relationships with the dairy industry and the local communities in which it would soon be a corporate dairy farmer.

Landcorp, which is to manage the farms for the Chinese as a condition of government purchase consent, said it expected to take over the running of all the farms early in December.

The purchase will be in the name of Milk New Zealand Holding, a subsidiary of Pengxin. The farms will be managed under a 50:50 joint venture between Milk New Zealand Farm Management and Landcorp.

Pengxin spokesman Cedric Allan said the joint venture company would soon appoint directors and a chairman.

Milk New Zealand Holding would set up an office in Auckland soon, he said.

Iwi trusts chairman Hardie Peni could not be contacted.

The trusts were earlier part of a consortium of New Zealand farmers led by Sir Michael Fay, which unsuccessfully counter-bid for the 16 farms, which went into receivership nearly three years ago.

Allan said Pengxin was still prepared to talk to iwi "on a commercially realistic basis" over the sale of the two Benneydale farms.

Milk New Zealand was also interested in acquiring further dairy farms.

The company had invited a Maori business delegation to visit China this year to talk about more opportunities with wider iwi, Allan said.

Landcorp chief executive Chris Kelly said the joint venture company intended to spend "some $15.7 million" on the properties in the first three years.

Initially it would supply milk from the farms to Fonterra.

But with ownership finally in sight, Allan said the Chinese company was now able to make progress on its options to process milk to create a range of high- value consumer products for sale in China.

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Allan said this could be under a contract agreement with a New Zealand supplier or a joint venture with a Kiwi company. Milk New Zealand Holding has set aside a marketing budget of $100m in China in the first five years, he said.

- Waikato Times

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