China's Lianhua takes control of NZ meat company

Chinese investment in Invercargill's Prime Range Meats has now increased to a 75 per cent ownership. File photo /Greg Bowker

China's Lianhua Trading Group has gone to majority control of Invercargill meat processor, Prime Range Meats.

Lianhua, whose parent company - Shenzen Lianhua Enterprise Development Co - has its own retail network in China, said had increased its holding to 75 per cent from 24.9 per cent.

Prime Meats said the move meant it was "firmly hooked" into a secure supply chain in China through the parent, which has Haidilao Hot Pot Chain and McDonalds as customers.

The move has been approved by the Overseas Investment Office (OIO), which was required because part of Prime Range Meats assets include 99.1 hectares of land used for holding stock for the plant, some of which is sensitive wetlands and bush.

Prime Meats managing director Tony Forde, and shareholder, Southland motor racing personality Inky Tulloch, and associated parties have sold down after diluting their shareholdings earlier this year, through the issue of new shares.

The new capital would be spent on Prime Range Meat's plant, it said.

"While we are not ready to hang up our boots yet, Inky and I are not getting any younger and the future of Prime Range Meats really needed to be secured," Forde said in a statement.

"This deal means the plant will get the capital it needs to be not only sustainable, but expand over the next five years," he said. Force said the company' work force would increase from the current 120 to around 170 as a result of the move.

The meat industry has continued to struggle with issues of overcapacity and competition for stock.

"This will be a real boost to all Southland and Otago farmers, who now have one solid option that stands out from the turmoil about the future of the red meat sector," Forde said.

"Prime Meats is ready to talk to interested farmers about what we can offer now and to show them the future potential of having long term supply arrangements for quality stock."

Lianhua executive director Mark Ma said the group was formed at the start of this year to invest in the beef and sheep meat industry in New Zealand.

Ma, a permanent resident who has lived in Auckland since 1999, had been charged with finding the best ways to secure further beef and sheep meat for the supply chain in China.

"That way we are able to ensure we get the cuts that are suitable for the Chinese market, which are often different to the traditional cuts that New Zealand processors have supplied to Europe and the United States," Ma said.

Shenzen Lianhua's food industry division has been responsible for importing thousands of tonnes of beef and sheep meat in to China since the 1990s from places like Brazil, Uruguay, Argentina and Australia, as well as New Zealand.

Last year it brought nearly $500 million of red meat in to China. Ma said its team is highly experienced at handling the requirements needed to meet China's Inspection and Quarantine Services specifications for food arriving at China's borders.