NZ investors throw cash across Ditch

CANBERRA - New Zealand investment continues to pour across the Tasman, with new figures pushing the level of Kiwi acquisitions in Australia to more than A$11 billion ($12 billion) in the past five years.

Concentrated heavily in manufacturing and services, and weighted by the operations of such majors as Fonterra, Burns Philp and Carter Holt Harvey, the flow that in 2003-04 ran at A$1.554 billion confirmed New Zealand's position as the seventh-largest foreign investor in Australia.

The Department of Foreign Affairs and Trade says that in 2003 total two-way investment was A$56.7 billion and continues to trend upwards, with average annual growth estimated at 18.6 per cent since the start of closer economic relations in 1983.

New data from the Foreign Investment Review Board shows that in 2003-04, the number of investment proposals from New Zealand ran at a five-year high of 44, focussing mainly on manufacturing and tourism, but also embracing significant acquisitions in services, real estate and finance and insurance.

In the past five years, FIRB figures show, New Zealand has pumped an average of A$2.22 billion a year across the Tasman, peaking at A$4.119 billion in 2002-03 when Burns Philp acquired Goodman Fielder for about A$2 billion.

Other significant spikes in the investment flow included Carter Holt Harvey's A$300 million bid for CSR's wood panel division and its New South Wales sawmill in 1999-2000, and National Foods' takeover of cheese maker King Island in 2001-02.

Although National Foods was mainly owned by Australians, it was classed as a foreign investor because of the significant stake held at the time by Fonterra.

The latest FIRB figures show that in 2003-04 New Zealand pushed A$1.16 billion into manufacturing in Australia, A$197 million into tourism, A$91 million into services, A$55 million into real estate and A$51 million into finance and insurance.

New Zealand was the second-largest investor in tourism, behind Malaysia, and the sixth-largest in manufacturing, behind Singapore, the US, the United Kingdom, Germany and Canada.

In total, FIRB processed 4447 foreign proposals from all sources in 2003-04, representing potential investment of A$99 billion - an increase of 15 per cent on the previous year.

The US was again the largest investor, with its proposed A$29.8 billion representing almost one-third of the total and outstripping by far the proposals by the next-largest investors, Singapore (A$9.333 billion), the UK (A$6.807 billion) and Germany (A$6.2 billion).

The heaviest total investment, of A$34.782 billion, was directed at the services sector - mainly in communications - with A$25.705 billion flowing to real estate and A$23.056 billion to manufacturing.

FIRB data shows that over the past five years New Zealand investment across the Tasman has been concentrated heavily in manufacturing, totalling A$7.869 billion and accounting for about 70 per cent of the total flow. The next-largest target was the services sector.

* New Zealand is the seventh largest investor in Australia.

* Proposals lodged with Australia's Foreign Investment Review Board last year reached a five-year high.

* Over the last five years total investment amounts to A$11 billion.

* Major investors were Fonterra, Carter Holt Harvey and Graeme Hart's Burns Philp.