NZ still a target for Chinese dairy firm

May Wang. Photo / Greg Bowker

The Chinese-owned dairy company behind the failed bid for more than a dozen Crafar farms has told the Hong Kong Stock Exchange it is continuing to pursue business opportunities in New Zealand's dairy industry.

Natural Dairy says it is still interested in dairy farming in this country, as well as sourcing "specific dairy products" and/or striking deals with local dairy processors, either "directly or indirectly".

It also appears determined to take full control of a New Zealand subsidiary initially fronted by bankrupt businesswoman May Wang, and has indicated it may announce further plans before the end of this month.

Since its offer to buy the Crafar farms was turned down by the Government last year, the company has continued to develop a chain of retail stores in China, and has also developed a bottling factory in Jiangxi. It has also organised a high-profile advertising campaign on China's main television channel.

But the company still has a few hurdles to jump, including resolving with the Overseas Investment Office what will happen to four Crafar farms the OIO claims it has already illegally purchased.

It is understood the Serious Fraud Office is also continuing to investigate the company.

Natural Dairy has been suspended from the Hong Kong Stock Exchange for most of the past 18 months, while shareholders - including at least one prominent Chinese billionaire - await details of its plans.

On Friday, it revealed it had made a loss of HK$154.3 million ($23.5 million) in the year to the end of May.

It lost a similar amount last year. But it remains upbeat about its future, noting that the latest result includes just one month of UHT milk sales from New Zealand. The company has a contract to buy UHT milkfrom a dairy factory set up in Tauranga by Wang.

Natural Dairy purchased a 20 per cent stake in UBNZ Assets - a New Zealand company formerly fronted by Wang - in February last year for HK$379 million.

It has told shareholders that stake is now worth HK$470 million, and it still intends to buy the rest of the company, "including its dairy properties and dairy cattle interest".

However, it has made no mention of the fact that the OIO claims it purchased those properties, which total nearly 9000ha with more than 28,000 cows, illegally.

A spokesman for the OIO said the office had still not received a submission from Natural Dairy about why it believed it did not require OIO approval to buy the four farms. However, it expected to receive it shortly.

Natural Dairy's accounts show that, over the past year, it has paid a HK$514 million deposit to a UBNZ company, considered a related party. It has also declared related party transactions totalling HK$43 million.

Meanwhile, biotech company Genesis Research and Development has revealed it is still waiting to receive money promised from another company formerly linked to Wang, UBNZ Funds.

Chief executive Stephen Hall was last week reported as saying that UBNZ had expressed interest in subscribing for "significant new capital" in Genesis. However, documentation had not yet been finalised, he said.

In September last year, UBNZ loaned the cash-strapped company $250,000 through a convertible note, adding to its $466,000 injection for a 16.3 per cent stake in the firm.