Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


China's Yili to buy Oceania Dairy for $214 mln

China's Yili to buy Oceania Dairy in $214 mln spend-up on infant formula

plant

By Paul McBeth

Dec. 27 (BusinessDesk) - Chinese dairy firm Inner Mongolia Yili Industrial Group plans to spend $214 million building an infant formula plant in South Canterbury in a deal that will see it take over Oceania Dairy Group.

Yili will acquire Oceania to access its land resource consents to build a plant over 38 hectares in South Canterbury, according to a notice on the Shanghai Stock Exchange on Dec. 18. The Chinese firm said it's attracted by New Zealand's relatively cheap raw milk and the prospect of the free-trade agreement with China completely removing Chinese import tariffs by 2020.

The plant is scheduled to be completed by June 2014 operating at 60 percent capacity, with annual full capacity of 47,000 tonnes expected in the 2016/17 year.

The deal is subject to Overseas Investment Office and Chinese government approval.

Chinese investment in New Zealand has been a heated topic in recent years after bids to buy large tracts of farm-land forced the government to announce a U-turn on its plans to free up overseas investment and a High Court ruling made the Overseas Investment Office impose a more rigorous analysis of foreign purchases.

Oceania Dairy sold milk supply contracts to Synlait Milk, which is half-owned by China's Bright Dairy, last year after failing to raise about $75 million to build a milk powder plant near Glenavy that would have processed 220 million litres of milk a year, producing 32,000 tonnes of powder.

Yili said it has a preliminary cooperation agreement with some local farmers to supply the plant, and indicated plans to draw on Fonterra Cooperative Group's regulated supply of raw milk.

Oceania Dairy director Don Brash told the NewZealandInc.com website that Yili had to announce the deal once its board had decided to go ahead.

Yili had been named as a potential suitor to New Zealand Dairies' South Canterbury milk processing plant in 2010, when Russian owner Nutritek Group started shopping around for a buyer.

Fonterra ultimately bought the plant this year out of receivership, and a phantom buyer claiming to have offered a better deal said it missed out because it needed OIO approval.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news