WELLINGTON: A unit of China’s state-owned Bright Food Group Co Ltd will take a half share in New Zealand’s biggest meat co-operative for NZ$311 million ($197 million), as China looks to import more of the country’s agricultural products.
Sheep and beef exporter Silver Fern Farms said on Tuesday it would sell a 50 percent stake to food processor Shanghai Maling Aquarius, a Bright subsidiary, giving it funds to repay debt and helping to boost its exports.
The deal is the latest in a string of investments in agriculture by companies in China, the world’s biggest meat consumer, where a growing middle class has encouraged firms to look overseas for sources of meat, dairy and other proteins.
“The long term prospect for New Zealand agriculture including meat is positive, so we’re not surprised to see offshore interest in domestic agribusinesses,” ASB rural economist Nathan Penny said.
Shanghai Maling said the purchase would give it access to the New Zealand company’s high quality produce and help it almost triple its revenues versus 2014 to as much 30 billion yuan ($4.71 billion). “Once this deal goes through, our company will quickly become China’s biggest consolidated lamb and beef industrial group,” Maling said in a statement to the Shanghai exchange.
Officials for Bright Food and Shanghai Maling declined to comment further on the deal. New Zealand is the world’s biggest sheepmeat exporter and fifth-largest overseas supplier of beef, sending roughly one-third of its exports by value to China in the year to June.
Silver Fern Farms, a farmer-owned co-operative, controls about 27 percent of New Zealand’s beef and sheepmeat export market but has been hurt by a collapse in sheep meat prices and has struggled to make deep inroads into growing export markets.
“This is a substantial capital investment,” Silver Fern Farms Chairman Rob Hewett told reporters. “Our partner’s assets are considerable, and we will look to leverage those opportunities into China.”
Bright, which processes foods ranging from sweets to pork products to rice wine, has been on a global acquisition spree in recent years, with British cereal maker Weetabix and Australian dairy company Mundella Foods among its buys. Bright already has a roughly 40 percent stake in New Zealand infant formula processor Synlait, while other Chinese firms have also been active in the country.
