Chinese eye southern dairy farms

The Chinese-backed buyer planning to invest $1.5 billion in New Zealand's dairy industry is understood to be investigating the purchase of up to 100 farms in the lower South Island.

Natural Dairy (NZ) has interest from the owners of farms in Otago and Southland and is understood to be considering building a dairy factory in Southland, according to local media.

Spokesman Bill Ralston told the Otago Daily Times that approaches to farm owners in the region were "initial due diligence" and that no commitments or agreements would go ahead until the company had received a ruling from the Overseas Investment Office on the proposed purchases of several North Island properties.

New Zealand First leader Winston Peters attacked Chinese-backed investors during a speech delivered yesterday, saying that the potential sale of the Crafar farms was a "dumb idea" that would only serve to turn New Zealand into a "separatist" society.

Natural Dairy said last month it had agreed to buy the Crafar family farms as well as other assets including farmland, cattle, and milkpowder production plant.

The deal would be paid for in cash and through the issue of convertible bonds, the company said in a statement to the Hong Kong Stock Exchange.

The Crafar family was New Zealand's biggest family-owned group of dairy farms.

They built a dairying empire with 20,000 milking cows, 10,000 other stock, 200 staff and around $200 million of debt with Westpac, Rabobank and PGG Wrightson Finance.

It was placed in receivership on October 5 last year.

- NZ HERALD ONLINE, OTAGO DAILY TIMES, NZPA