Foreign investor statistics dip

By BRIAN FALLOW economics editor

The Overseas Investment Commission approved a net $398 million worth of foreign investment into New Zealand last year, the lowest figure since 1993.

But the figures reflect commission consents rather than actual investment and include transactions which do not go ahead.

Last year the commission approved Fletcher Forests' planned $1.5 billion purchase of the other half of the Central North Island Forest Partnership. As the sale was to be from a company 100 per cent owned by overseas persons to a company at least partially owned by New Zealanders, it represented net foreign disinvestment of $433 million.

The OIC's net investment figures factor out sales of interests from one foreign owner to another.

It testifies to the extent New Zealand assets are already foreign-owned that over the past five years only 36 per cent of the $46.8 billion worth of gross foreign investment approved by the commission represented a sale from New Zealand to overseas investors.

The commission said the CNIF transaction was unlikely to proceed and if it was excluded from the figures the net investment approved last year would be $831 million.

That is higher than 2001's $789 million, but still well below the average net investment figure over the past five years of $3.4 billion. Gross investment last year was $6.4 billion (or $4.9 billion excluding CNIF).

The two largest net investments last year were Danone's purchase of Frucor (a net $116 million) and Lion Nathan's purchase of winemaker Wither Hills Group (a net $42 million).

Earlier figures from the commission identified only $90 million as greenfields investment, as distinct from the purchase of existing assets.

The commission's consent is not required if the overseas investor is acquiring less than 25 per cent of an asset or if the investment is less than $50 million.

Last year it approved the sale of 32,552ha of land. Over the past five years it has approved the transfer of 278,000ha or 1.3 per cent of New Zealand's farmed or forested land.

Statistics New Zealand says the stock of foreign equity in New Zealand was $54.5 billion at the end of last year, $2.9 billion higher than a year earlier. That includes reinvestment of profits, and portfolio investments, in which the foreign investor has an interest of less than 10 per cent.