Chinese firm wins approval to purchase NZ farms

The bid by a Chinese firm to buy 16 dairy farms has won approval from the New Zealand government, which indicates there will be more business opportunities for Chinese dairy companies in the country, experts said Saturday.

New Zealand's Land Information Minister Maurice Williamson and Associate Minister of Finance Jonathan Coleman announced Friday they had granted consent to Milk New Zealand Holding Limited, a wholly owned subsidiary of Shanghai Pengxin Group Co, to acquire 16 Crafar farms, which have been in receivership since October 2009, according to a statement on Land Information Department's website.

The acquisition would support the supply of high-quality dairy products to the Chinese market, said the statement.

It is the first successful acquisition of New Zealand farms by a Chinese company, Wang Dingmian, director of the Guangzhou Dairy Association, told the Global Times Saturday.

"This success indicates the opening of New Zealand's dairy market. Chinese companies can have more access to the local animal husbandry resources and import dairy products into China which has insufficient milk sources," Wang pointed out.

With a developed animal husbandry sector, New Zealand strictly controls milk sources and Chinese companies made several bids in the past to buy farms in the country but failed, noted Wang.

"With high quality and safe milk sources, New Zealand has been the largest exporter of dairy products to China in the past 10 years, accounting for 70 to 75 percent of the total imports," Wang noted.

"Chinese companies are likely to buy more dairy firms and even farms in New Zealand because of the low cost of dairy products in the country, as well as lower tariffs under the Sino-New Zealand free trade agreement," said dairy researcher Pu Xiaoqiang of the Distribution Productivity Promotion Center of China Commerce.

The tariffs on imports of dairy products from New Zealand to China were further reduced beginning January 1, 2012, and tariffs on baby formula milk powder and yogurt have been abolished, in line with the free trade agreement between the two countries.