Crafar farms buyer aims for spring start to milking

ANDREA FOX
Last updated 08:05 03/05/2012

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China's Shanghai Pengxin is in talks with Fonterra over processing its milk from the Crafar farms, Andrea Fox reports. 

Crafar farms buyer Shanghai Pengxin is planning to be on the dairy farm estate by spring at the latest and is in talks with Fonterra over processing its milk.

Pengxin spokesman Cedric Allan said "all energies" were now focused on getting state-owned enterprise Landcorp installed as manager on the 16 farms, but he would not say whether the $200 million-plus deal with Crafar receivers KordaMentha was unconditional or the farms paid for.

"That's an issue for us and the receivers. We don't want to play Michael Fay's game on this," Allan said.

Fay's group of Kiwi farmers and iwi, which has unsuccessfully bid $171.5m for the central and southern North Island farms, has lodged a fresh High Court challenge against the deal – the second round of court proceedings it has taken to try to block the sale to the Chinese.

Pengxin, which will buy millions of Fonterra supply shares as part of the deal, intended to be "a full participant in the dairy industry", Allan said.

"We are in discussions about working with Fonterra in New Zealand and China. Fonterra may well do some initial processing for us."

This would mean Fonterra helping Pengxin in its plan to export branded dairy product to China.

Allan said Pengxin chairman Jiang Zhaobai attended the official opening of Fonterra's second dairy farming venture in China. Fonterra plans at least five large dairy farms on leased land in China. "We are calmly proceeding with our business plan."

The receivers could not be contacted for comment.

Allan said Pengxin would honour all agreements between sharemilkers on the farms and receivers and work was under way with Landcorp on a management and investment plan, which would kick off with effluent disposal improvements, new housing, and pasture improvement.

"We are definitely going ahead. This has developed into a mad game of snakes and ladders. Pengxin's ability has been scrutinised twice by the OIO (Overseas Investment Office), once by the court, and twice by the Government ... we are moving forward."

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- © Fairfax NZ News

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