Chinese firm plans Sth Canty dairy factory
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.
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 and full annual capacity of 47,000 tonnes expected in 2016/17.
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 farmland 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 $75m to build a milk powder plant near Glenavy that would have processed 220 million litres of milk a year.
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.
NZN
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.
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 and full annual capacity of 47,000 tonnes expected in 2016/17.
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 farmland 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 $75m to build a milk powder plant near Glenavy that would have processed 220 million litres of milk a year.
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.
NZN
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