Japanese buy CHH pulp, paper business
New Zealand's richest man is selling part of his Carter Holt Harvey empire to a Japanese government-backed joint venture.
Graeme Hart's Rank Group investment company said this morning that Japanese paper manufacturer Oji Holdings and Japanese government-backed investment fund Innovation Network Corporation of Japan would buy the pulp, paper and packaging business for $1.037 billion.
The business is made up of the Kinleith pulp and paper mill, Tasman pulp mill, Penrose paper mill, and the CHH Group packaging businesses in Australia and New Zealand.
Hart's wealth was estimated at $6.4 billion in the 2013 NBR Rich List. He bought Carter Holt Harvey in 2005-06.
Rank Group spokesman Mike Youngman said negotiations has been underway for several months. The deal needs to get Overseas Investment Office approval as well the okay from Australian regulators but this was expected in coming months.
''There are no plans at this stage'' to sell the other part of the CHH business, Carter Holt Business Supplies which includes the Carters group and Woodproducts NZ and Australia, he said.
''The decision [to sell was made because] this specific set of assets doesn't fit the Rank Group investment strategy,'' Youngman said, which has focused more in the United States recently.
The would-be purchasers have said they plan to offer all existing employees jobs on their current terms and conditions, he added.
This was back up by the EPMU which has members working across the sites being sold.
''We're quite confident as it's being sold to a pulp and paper company rather than private equity that might asset strip. It gives more job security and [the buyers] may even invest,'' EMPU national industry organiser Ron Angel said.
The union is meeting the company on Monday to discuss the transition.
New Zealand First leader Winston Peters said the sale was a 'sad story' and ''one more example of what's wrong with the fundamentals of [the NZ] economy''.
''It just makes no sense for an export-dependent economy to sell export creating assets,'' Peters said.
Oji is a large international pulp and paper packaging business that is listed on the Tokyo Stock Exchange. INCJ is a corporation sponsored by the Japanese government and by Japanese private enterprises.
''Oji have a long history of investing in New Zealand. Oji first invested in the Pan Pac forest business in the Hawkes Bay in 1971. Since 2002, Oji have spent around $180 million on forest land and manufacturing investment for Pan Pac including a significant upgrade of the pulp mill completed in 2012,'' Oji executive chairman Kazuhisa Shinoda said.
Oji could provide additional know-how and technology that would help improve and grow the business and could also open up new sales opportunities overseas including with Oji owned companies that consumed some of the products CHH made, he said.
A Land Information New Zealand spokesman confirmed the deal would require consent under the Overseas Investment Act, as it involved sensitive land and business assets worth more than $100 million.
"The Overseas Investment Office (OIO) currently does not have an application from Oji Paper Co, Ltd to acquire up to 100 per cent shares in Carter Holt Harvey Pulp & Paper Limited."