Larger Japanese stake in Anzco gains OIO approval
A Japanese company investing just over $40 million has won Overseas Investment Office approval to buy a larger stake in the major meat processor Anzco Foods founded by chairman Sir Graeme Harrison.
Existing shareholder Itoham Foods met overseas investment criteria to lift its ownership to 65 per cent of the company, from 48.2 per cent, after buying three lots of shares from Nippon Suisan Kaisha Limited, known as Nissui, Harrison and Janz Investments which is majority owned by Harrison with senior Anzco managers.
Anzco is now a subsidiary of Itoham which is Japan's second largest meat based manufactured and processed foods company. Itoham announced in February it wanted a larger shareholding as part of expansion plans in its processed meat business to meet growing Asian demand.
Harrison said the Itoham transaction amounted to about an 8 per cent change in overseas ownership of Anzco, increasing from 73.5 to 81.8 per cent.
He said Anzco was expected to have a closer link to Itoham's largest shareholder, Mitsubishi Corporation.
"What this does is show we have access to a global value chain and it's a great vote of confidence in the New Zealand meat industry, by Mitsubishi and Itoham, a long listed company. Mitsubishi is easily within the Global 500 companies."
Nissui previously held just over 25 per cent of the company and Harrison 12.56 per cent with another 11.7 per cent owned by Janz Investments - two thirds owned by Harrison.
Anzco begun operating in 1984 and was initially owned by farmers through the New Zealand Meat Producers Board. Their $350,000 investment returned them more than $40m when, in 1995, Harrison led an investment group including Itoham and Nissui to buy the board's shareholdings and eventually Huttons Kiwi.
Harrison said the group had remained extremely loyal after Japan opened access to beef trading and their long term view to business had assisted Anzco.
Harrison said a sign of their confidence in the company was that Nissui - which increased its stake in 2001 to 25 per cent - had never sent a shareholder representative to a board meeting since 1997.
"This is truly what partnerships are all about. It is based on trust and an open relationship and it's a lesson about removing emotion and misinformation from foreign investment."
He said New Zealand's primary sector depended on foreign investment and if more growth was wanted then "no one should hesitate" about bringing in more overseas investment.
The Japanese partners and other shareholders had received fully imputed dividends from their investment twice a year apart from six months since 2001. Since then they had received capital growth returns of 10 per cent year on year, he said.
"How many New Zealand investors would like an investment like that? And yet they had it (before 1995)."
As part of the deal Harrison sold some of his shares for the first time because he was "heading to retirement". If he was 10 years younger there would be no chance he would have sold his stake, he said.
Harrison had owned just over 20 per cent until the OIO approval and his stake now sits at 14 per cent.
He has increased his farming interests by investing in a farm which has a cattle operation and some sheep and which will soon run deer. Harrison has put funds aside to set up a professorial chair at Lincoln University and a research associate position as well as scholarships.
Anzco is New Zealand's second largest beef company and third largest meat business, with 3000 employees and annual sales revenue of NZ$1.3 billion. The company operates New Zealand's only large scale cattle feedlot and seven slaughter and processing sites plus manufactures food sites.