New China bid to buy Crafar dairy farms

File photo / Christine Cornege

A new Chinese bidder could reveal its plans for the Crafar dairy farms as soon as today.

It is understood industrial conglomerate Shanghai Pengxin will file its application with the Overseas Investment Office this week.

The company, which says it has more than $3 billion invested in property, mining and agriculture around the world, will face tougher rules than Natural Dairy, the Chinese company whose bid for the farms was turned down by the Government at the end of last year.

The two brothers who founded Shanghai Pengxin, Jiang Zhaobai and Jiang Lei, are understood to have been born into poverty, but have made enough money through property development in Shanghai to put them in the top 50 of China's wealthiest billionaires.

Their private company does not have a long history in the dairy industry, but has a sheep-breeding operation in China.

It has also invested in soybean and corn growing in Bolivia, and has agricultural interests in Argentina and Cambodia.

Spokesman Cedric Allan said yesterday the company was not yet seeking further investments in New Zealand "but it would be fair to say they would be open to any opportunities that may arise".

Rules which came into effect in January after a public outcry over the sale of rural land to overseas interests, are intended to make it tougher for foreigners to control the entire rural supply chain, from farm to factory.

Anything that threatens New Zealand's "economic interests" will be frowned on.

But investors will be able to argue "mitigating factors", by showing they will allow New Zealanders "to oversee or participate in" any such investment.

The Overseas Investment Office rejected Natural Dairy's bid to buy 16 Crafar farms last year, saying some of its backers did not meet "good character" requirements.

It also refused to give the company retrospective approval for another four farms it had already bought from the Crafar family.

The decision was endorsed by the Government, which had the final say.

But Natural Dairy has not yet surrendered the four farms, and has told its shareholders it is determined to set up a substantial dairy operation in New Zealand.

It is also not ruling out putting in another bid for the other 16 farms.

The OIO has not yet decided whether it will ask the courts to intervene.

A spokesman for the office said yesterday it was seeking legal advice before deciding what to do next.

Save the Farms spokesman Tony Bouchier said the group was opposed to any overseas investors.

"There is a credible offer here from Landcorp for that land, and we don't understand why they don't take it. These investors bring nothing to the table except money."