In My Opinion

Dita De Boni is a Herald business columnist

Dita De Boni: Kiwi rubbish reeks of success

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They're far from sexy, but our waste-handling businesses are certainly covetable.

Illustration / Anna Crichton
Illustration / Anna Crichton

Rubbish is a topic that few of us can be bothered thinking about, from one day to the next.

And in the unlikely event that we do think about it, those thoughts may be pretty pedestrian. We may wonder for the umpteenth time whether juice cartons can be recycled, if there is any way to stop our red-top bin from stinking, or if there is any reason why rubbish collection has to happen at top volume at 5am on a Monday, right outside the toddler's bedroom.

Another way to think of rubbish, though, is that New Zealand waste management systems are considered so innovative that large international concerns have been engaged in a pitched battle to own them, with the intention of using their intelligence in larger, more complex waste-generating markets overseas.

"To me, the interesting thing about this news is just how far Kiwis seem to have come in accepting large-scale Chinese investment in local business; in this case, core infrastructure to boot."
Dita De Boni

As of this week, Beijing and Hong Kong interests own almost all the country's refuse collection and landfill businesses between them. Last year Hong Kong's Cheung Kong Infrastructure Holdings bought EnviroWaste for $501 million.

Now, Beijing Capital Group has succeeded in its bid for the country's largest garbage handler, Waste Management. If the deal gets the nod from Kiwi and Chinese authorities, it will be the biggest Chinese acquisition of a local business since Haier Electronics took full control of Fisher & Paykel Appliances in 2012.

Offshore ownership of Waste Management is a shame only in the sense that the NZX missed the opportunity to again have the waste concern lighting up the board, as it did in the early noughties. In 2000, the American parent company of Waste Management NZ sold its 60.5 per cent holding in the company, leaving it to become the darling of the local bourse.

In 2006, Australia's largest recycling, waste management and industrial services company, Transpacific Industries, subsumed Waste Management NZ, paying a healthy $870 million for the company. But before the Global Financial Crisis, the Australian parent had dug itself too deep in debt, and by 2009 its majority owners were demanding it spin off non-core assets - the New Zealand business being just one.

Many large players pitched for the Kiwi business, but one rolled in with a $950 million cheque, and the deal was done. Beijing Capital, owned by the Beijing Municipal Government, will inject money into the business and, in return, share some of its intelligence, especially to do with environmentally sound waste management.

No, it's not as sexy as Lorde or milk powder, but it's the kind of low profile-but-critical niche occupied by many New Zealand companies - the kind of niche that the late Sir Paul Callaghan said would ensure this country's ongoing economic success.

To me, the interesting thing about this news is just how far Kiwis seem to have come in accepting large-scale Chinese investment in local business; in this case, core infrastructure to boot. When Shanghai Pengxin signalled its desire to buy the Crafar Farms in 2010, the deal sparked a national debate. By the time the same group acquired Synlait last year, the furore had already died down.

Now we have our waste-handling systems almost totally owned by people half a world away, and there's barely a peep. The only thing we don't know is whether that new mood is a sign of increased sophistication, resignation - or just an inability to give a toss about rubbish.

- NZ Herald

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