The West Coast Regional Council has admitted a secret $500,000 investment in a pest control company and new factory which is looking to manufacture 1080 poison at Rolleston, near Christchurch.

The council released a statement this morning after being outed by the Greymouth Star.

Once the factory is operational, the regional council will be involved in 1080 from manufacturing to consenting and even the application of the poison through another council-owned company.

Company Office records show the Rolleston partnership with Pest Control Research NZ Ltd was formed in May 2013. It has only two shareholders -- Christchurch man Malcolm Thomas with 51 per cent, and the West Coast Regional Council with 49 per cent.

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One director is Randal Beal, who formerly managed the council's resource consent stand-alone company, VCS.

The council said the investment had not been made public before now because it was "commercially sensitive".

Council chairman Andrew Robb was surprised at the questioning today and referred inquiries to chief executive Chris Ingle.

Mr Ingle responded: "In terms of manufacture of 1080 products, that is not currently occurring as of today, but PCR (Pest Control Research) is looking into developing improved products of that nature for the future".

To clarify, the Star asked "you have invested in this company, which is looking to manufacture 1080?" he replied "yes".

It was "a modest investment of $0.5 million, representing less than 5 per cent of the council's total investment fund".

Mr Ingle said the council was looking for options to diversify its investment fund and saw an opportunity to invest in industrial land in a growth area in central Canterbury. It was considered a very secure long-term investment both for capital growth and reliable rental returns.

His prepared statement made little mention of 1080, focusing instead on the council's investment portfolio.

Pest Control Research had signed up as the tenant.

"The rental return on this investment is projected to yield very positive returns compared with our current investment mix."

Mr Ingle said it was a progressive pest control product and pest control research business based in Christchurch.

It developed new products including "various new and more efficient traps for ferret, stoat, possum and rat control; pindone baits mainly for rabbit control; and a non-toxic pre-feed bait for possum control operations. New products, such as baits with deer (and other) repellents are being developed and tested currently".

The council had purchased a 49 per cent share of "this innovative business", to enable Pest Control Research to expand its current products.

"This investment represents a strategic diversification of council's $12 million investment portfolio and also complements council's VCS business unit's current work (pest control, including by 1080 poisoning)."

It would benefit West Coast ratepayers because it diversified the council's investment portfolio giving more security for the future of the investment fund.

Mr Ingle said the Izone subdivision at Rolleston was a popular industrial and innovation hub, with all transport networks close by and was close to the city.

He said the investment decision was initiated prior to the Department of Conservation's "Battle for Our Birds", which will see a massive increase in 1080 use, "so there was no direct link there".

In 2010, a petition by anti-1080 activists found 93 per cent of Westland residents were opposed to the poison, based on canvassing of 1500 people.

1080 poison is made by the Tull Chemical Company in Alabama, in the United States, and is banned by most of the world.

In New Zealand, the poison is manufactured into pellets by Animal Control Products Ltd (ACP), a Crown-owned company, which manufactures more than 90 per cent of the pesticide formulations containing 1080 used in New Zealand. ACP has a manufacturing site in Whanganui and previously had one in Waimate, according to the Environmental Protection Authority.