Overseas Investment Office grants Fletcher application for sensitive land in Cromwell

The Overseas Investment Office has granted a bid from New Zealand's largest national manufacturer of ready-mixed concrete to buy sensitive land at Cromwell.

But yesterday, the office issued an 'undecided' decision. A Fletcher spokeswoman said this was incorrect. The office has now updated its decision from undecided to granted.

Multi-billion dollar Fletcher Building's Firth is in a joint venture bid with Kiwi business McNulty's Investment, applying to buy 9.8ha of land classified as sensitive on Luggate-Cromwell Rd in Central Otago.

The office has previously approved most applications. The application comes ahead of tougher Government requirements on land sales to foreign buyers. Fletcher Concrete and Infrastructure had to apply due to the substantial foreign investment in Fletcher Building.

The Overseas Investment Amendment Bill was introduced to the House on December 14, had its first reading on December 19 and is now before a select committee. This bill amends the Overseas Investment Act 2005 to ensure that investments made by overseas persons in New Zealand will have genuine benefits for the country.

Submissions are now open and close on January 23. A report is due on February 20.

Overseas Investment Office information released yesterday showed more details on the Cromwell bid. The land is classified as sensitive because it is more than 5ha, non-urban and adjourns a reserve.

Cromwell Certified Concrete - the joint venture Firth is in - applied to buy the land from Jeremy Patrick Mackie and Jennenne Louise Mackie for $862,500.

"The land is currently bare land. The applicant intends to develop a quarry on the land, which adjoins the applicant's existing quarry," the OIO said.

"The investment will enable the applicant to increase extraction of aggregate to meet market demand and will also extend supply by approximately 15 years," it noted.
  
The benefits to New Zealand cited in the application were:

• "A high degree of New Zealand ownership and control of the applicant and investment;

• "Previous investments by the applicant and Firth that have been or are of benefit to New Zealand. Firth has around 650 employees at 70 plant sites around New Zealand;

• "Increased processing of aggregate, as the level of extraction will increase, and much of this will be processed through the applicant's ready-mix business or elsewhere;
 
• "The retention of jobs associated with the existing quarry and the likely creation of further roles in cartage;

• "Increased efficiency or productivity through a number of cost efficiencies associated with using existing plant, equipment and infrastructure.  The investment will also allow for greater exploitation of the existing quarry's resource," the OIO decision sheet said.