Foreign investment in Aotearoa/New Zealand
Overseas Investment Office – December 2012 Decisions
Dow Looking To Develop GE Crops In Canterbury?
Dow AgroSciences BV Dow Chemical Company, United States of America (100%) received approval for the acquisition of the rights or interests in 25.7% of the shares of Barenbrug Holdings BV which owns or controls a freehold interest in approximately 227.8 hectares of land at Canterbury. The vendor was Barenbrug Holdings BV Hubertus Josephus Maria Barenbrug, Netherlands (62.1%), Bastiaan Barenbrug, Netherlands (16.85%), Frank Barenbrug, Netherlands (16.85%) and Dutch Public (4.2%); asset value was stated as confidential
The OIO states: “The proposed overseas investment in New Zealand results from a much larger transaction that the Applicant is undertaking globally, involving assets in the Netherlands, Luxembourg, France, the United Kingdom, the United States of America, China, New Zealand, Australia, South Africa, Argentina, Brazil, Romania, Belgium, Poland and Denmark. The objects of the Applicant are to discover, develop, produce and sell products and services for the agricultural industry, with an emphasis on chemically, biologically or genetically derived products for crop protection, non-crop pest control and plant protection and enzymes, polymers, food, feed, fibre and other products that are produced from micro-organisms, plants or animals”.
This transaction appears to be part of a much larger strategic alliance between Dow AgroSciences and Barenburg. In 2012 DowAgroSciences bought a minority stake in Barenburg. According to the legal firm Cleary Gottlieb who advised Dow on the anti-trust aspects relating to this acquisition: “Dow AgroSciences and The Royal Barenbrug Group will build a global strategic relationship for the development and commercialisation of advanced germplasm in forage seeds.
“The Royal Barenbrug Group is a family-owned business, whose core activities are plant breeding, grass seed production and international marketing of seed for turf and forage grasses and legumes. With 25 branches in 16 countries on six continents, Barenbrug has been one of the leading grass seed businesses in the world for over 100 years. Dow AgroSciences is a wholly owned subsidiary of The Dow Chemical Company and had annual global sales of $US5.7 billion in 2011. Based in Indianapolis, Dow AgroSciences develops leading-edge crop protection and plant biotechnology solutions”.
So what is “advanced germplasm? According to Wikipedia, “a germplasm is a collection of genetic resources for an organism. For plants, the germplasm may be stored as a seed collection or, for trees, in a nursery”. Sounds a bit suspicious? According to www.encyclo.co.uk, it is “the genetic material, especially its specific molecular and chemical constitution that compromises the inherited qualities of an organism”. That sounds more worrying? This source goes on to say germplasm is “often synonymous with ‘genetic material’ it is the name given to seed or other material from which plants are propagated. An early theory of inheritance advanced the notion that hereditary characters were contained in an immutable ‘plasm’ transmitted unchanged from parent to offspring”. I am sure there are many readers more qualified than me to make an assessment of what Dow maybe considering at this site, however sounds to me like genetic engineering (GE)! See our commentaries for February 1997, March 1998, May 1999, July 2007 and July 2009 for further details of how Barenburg came to own this property and their other seed related purchases here.
Hart Sells Eight Dairy Farms To The Swedes
Southern Pastures Limited Partnership Swedish Public (99%) and New Zealand Public (1%) received approval to a freehold interest in approximately 3,205 hectares of land comprised in up to eight dairy farms located in the Waikato region. The vendor was Carter Holt Harvey HBU Limited and Rank Group Property Investments Limited Graeme Richard Hart, New Zealand (100%); consideration was confidential. The OIO states: “The Applicant is acquiring the properties to run as commercial dairy farms. The Applicant intends to increase sustainable production and develop the farming operations through additional capital expenditure, sound farming practices and good management”.
Rob O’Neil in the New Zealand Herald (10/3/13) reported further details relating to this transaction. “A new Swedish property fund quietly invested about $108 million in Australian and New Zealand rural land in 2012, according to its Annual Report, which also reveals the price it paid for eight dairy farms near Tokoroa sold by Forbes rich-lister Graeme Hart after being on the market for three years. Forsta AP-fonden (AP1), which manages $A35 billion ($NZ43b) in assets, revealed in its Annual Report that it had invested 311 million Swedish krona ($58m) in Australian agriculture through its First Australian Farmland Fund. It said that in 2012, AP1 invested in 15 rural properties in Australia and mostly dairy or cropping farms in New Zealand.
“In December last year (2012), the New Zealand Overseas Investment Office (OIO) granted its consent for Southern Pastures Limited Partnership, registered in March and 99% owned by AP1, to acquire a freehold interest in eight Waikato dairy farms totalling 3,205 hectares. The vendor was Hart companies Carter Holt Harvey HBU and Rank Group Property Investments. The OIO’s approval notice kept the price paid for the farms confidential, but according to AP1’s report it invested 316 million krona ($59.5m) for the New Zealand properties. That indicates the farms were sold for under $19,000 per hectare, less than half the average price paid ($39,976 per hectare) for dairy farms in the Waikato last year (2012). The farms were part of a bundle of 29 farms converted from forestry and put on the market in 2009. Media reports indicate there was still room to improve production on some of the farms and to complete their conversion. The investments highlight a wave of new corporate activity in farm land as global institutions increase their allocation to alternative assets during periods of volatile market returns”.
Tag Oil Continues To Expand Its Presence In New Zealand
TAG Oil Ltd Canada Public (95.2%), United States Public (4.5%) and various (0.3%) received approval for the acquisition of rights or interests in up to 100% of the shares of Opunake Hydro Limited which owns or controls a leasehold interest in five hectares of land at Domett Street, Opunake, South Taranaki. The vendor was Opunake Hydro Holdings Limited Karo Interests Limited Partnership, New Zealand (80%), DT Katere Holdings Limited, New Zealand (10%) and Kevin Johnson, New Zealand (10%); consideration was confidential.
The OIO states: “TAG is a Canadian oil and gas exploration and production company with operations focused exclusively in New Zealand. It is seeking to expand its operations into electricity generation and retailing. To this end, it intends to acquire up to 100% of the ordinary shares in Opunake Hydro Limited (“OHL”). OHL owns and operates the Opunake hydro electric power station. As a result of the investment, OHL will acquire and install several gas fired generators. The generators will provide OHL with an additional and more stable supply of energy. It will also provide TAG with an additional market for its gas”.
As we reported in our March 2012 commentary, TAG Oil Ltd is a Canadian-based production and exploration company with operations focused exclusively in New Zealand. TAG is also actively drilling high impact exploration prospects identified across more than 2,953,810 net acres of land in New Zealand. TAG operates two lightly explored new field discovery areas, the Cheal and Sidewinder oil and gas fields. There are currently 19 wells at the Cheal field capable of production, eight of which are currently on-stream. The Sidewinder field has four wells, all currently on-stream.
Japanese Sell Summit Wool Spinners To Godfrey Hirst
Canterbury Spinners Limited Australian Public (77.8%) and New Zealand Public (22.2%) received approval for acquisition of a freehold interest in approximately 6.7 hectares of land at Oamaru. The vendor was Summit Wool Spinners Limited Sumitomo Corporation, Japan (100%); consideration was confidential. The OIO states: “The Applicant, a subsidiary of Godfrey Hirst NZ Limited, is in the process of buying the business and assets of Summit Wool Spinners Limited, which includes sensitive land in Oamaru, Otago. The sensitive land contains a number of industrial buildings and is used as a plant to spin carpet and rug yarn. The Applicant will review the wool spinning business operated on the land and report to the Overseas Investment Office what, if any, changes will be made to the business. The Applicant will also make a donation to an appropriate body for use in enhancing public area(s) in Oamaru”.
Of course changes were to be made to the business and unfortunately it involved the loss of many jobs, nearly 200 of them. Andrew Ashton of the Otago Daily Times describes the last shift on 28 February 2013. “As shift workers at the Summit Wool Spinners plant in Oamaru clocked off for the final time yesterday, the Ministry of Social Development (MSD) said it was well placed to help them find new employment – and job offers are already being made. The plant will not officially cease operating on the site until today, but wool spinners made redundant following the sale of the plant finished up yesterday.
“Shortly before and after 5pm, the last few employees left alone or in pairs. The employees’ car park on Weaver St used to be full at that time of day with the changes in shifts – at 4.30pm yesterday there were 11 cars there. Most workers did not want to stop to talk to the Otago Daily Times, and those who did would not give their names. They said it was a sad day, with only a handful of staff in the last shift. One man said the plant had been a major part of Oamaru’s employment structure for decades, members of the family having worked there for generations.
“Another man was confident there would be something on the site in the future. “It [the mill] has been there for more than 130 years, survived two world wars and a depression’, he said. Social Development Labour Market Manager Emma Hamilton said employers in Oamaru, and across the Canterbury and Otago regions, had already made inquiries about the availability of Summit employees. Ms Hamilton said only a “small number” of employees had so far registered with WINZ (Work and Income NZ), but more were expected to register once they received their final pay cheque. She said a dedicated resource centre had also been established in Oamaru to deal with the expected influx of inquiries from redundant workers and ensure a ‘smooth transition’ into other employment.
“Our staff are keeping in regular contact with the Summit management in order to streamline suitable vacancies so that they are able to quickly advise staff, and we have one full time work-broker matching Summit workers to suitable job offers as they become available. “The Canterbury Jobs Hub is listing between six and eight new jobs every day, and has approximately 230 jobs available. Our team is working with a local training provider … to provide some targeted assistance specifically for Summit staff, if required’. She said there were about 20 positions available in the Oamaru area.
“Waitaki Mayor Alex Familton said he had been “very impressed” with the response from the ministry. “The MSD have prepared themselves very well. In the first instance they had meetings with up to 70 affected staff just to begin to get an expectation about what the possible options should be’. Mr Familton said the Ministry would offer ‘across the board’ assistance to affected workers” First Union Textiles Secretary Paul Watson said both Mr Familton and the union had been in contact with the Ministry to seek funding for an additional support programme.
“The Union is also committed to establishing ongoing support for all redundant workers by working with the Mayor of Waitaki District to establish a redundancy support programme that offers additional support than that offered by Government agencies. This approach has worked well in previous redundancies in the textiles sector …’ He added that the Union also had collective employment agreements at other Godfrey Hirst and Canterbury Spinners work sites, and had been in regular contact with the company. “Obviously we would want to see the establishment of long-term employment security for those offered jobs and more will emerge on this point in the near future’. However, workers still had no certainly about their futures, he said. “Summit made a significant contribution to Oamaru. It has long been the town’s major employer. Its closure is a very painful one for its workforce and their families. ‘That there is still no certainty on the future of the plant under Canterbury Spinners makes it more difficult for the workers and the community”.
David Bruce of the Otago Daily Times on 13 March 2013 provided the latest update: “The long-term future of the Summit Wool Spinners plant in Oamaru will not be known until May at the earliest, with new owners Godfrey Hirst employing 61 workers in the interim. Through its subsidiary Canterbury Wool Spinners, Godfrey Hirst bought the land, buildings and plant from Sumitomo Corporation of Japan, taking over at the beginning of this month. A spokesman for Godfrey Hirst said yesterday the company had re-employed 61 people for various jobs around the plant, including restarting production of carpet yarn. The principal job was to see how the plant performed, assess the operation and the logistics of using the plant in the future. “We should have a clearer picture by May about the future of the plant”, he said.
“Godfrey Hirst’s Canterbury Wool Spinners had a plant at Bromley, but it was closed by the Christchurch earthquakes and production transferred to the North Island . While it still has to decide what to do with Summit, maintaining a South Island presence would seem logical. The Otago Daily Times understands the workers are under a permanent individual employment agreement based on similar terms and conditions of collective agreements the company has negotiated with First Union in the North Island and comparable to what they had under Summit. A collective agreement is expected to be negotiated at some point.
“Sumitomo bought Summit Wool Spinners in 1992 from Alliance Textiles. It employed about 250 people at the beginning of last year (2012), but a fall in international demand for its products saw a call for voluntary redundancies and a reduction in staff to 192. However, a continued slump in the market for carpet yarn led to the plant being sold to Canterbury Spinners. Waitaki Mayor Alex Familton has welcomed the employment of the staff as “good news”. He said another 30 former employees had already found other jobs”.
Other December Decisions
William Mehring United States of America (100%) received approval to acquire a freehold interest in approximately 136.1 hectares of land at 42 Matheson Road, Helena Bay, Whangarei. The vendor was SR Lovelace, KJ Twomey, RE Lovelace & GR Lovelace New Zealand (100%); consideration was $760,000. The OIO states: “The Applicant intends to acquire the property in order to eventually reside on the property. The Applicant has obtained a QEII National Trust covenant to protect approximately 59.5 hectares of forest and bushland located on the property”.
Morris Salomon Kahn, Shmuel Meitar, Benjamin Yehoshua Kahn and David Simon Kahn Israel (100%) received approval to acquire a freehold interest in 39.7 hectares of land at Walter Peak, Queenstown. The vendor was Walter Peak Developments Limited (In Receivership and Liquidation) Justin Stanley Russell, New Zealand (50.0%) and Roderick William Guthrie Nielsen, New Zealand (50.0%); consideration was $3,850,000. The OIO states: “The Applicants are the beneficial owners of Walter Peak Station (a high country farming operation near Queenstown). This application relates to their acquisition of around 39 ha of adjoining land which they sold to a New Zealand property developer in 2006 (formerly part of Walter Peak Station). The property developer holds a resource consent to construct cottages and a lodge on the land. However, the property developer is now in receivership and liquidation and cannot progress the project.
“The Applicants are re-acquiring the land in order to complete an extensive indigenous planting programme, as well as other infrastructure improvements, required under the resource consent. They also intend to integrate the land back into its Walter Peak Station farming operation (the land currently has no productive use)”. Walter Peak Station was originally purchased by Americans Ian and Tonya Koblick and the Kahns in 1998 (see our October 1998 commentary). In January 2009 they sold (with retrospective OIO approval) a 27.5% interest to Meitar for $1 and further ownership restructuring occurred in July 2011.
And finally for December: Heli Luo China, People’s Republic of (100%) received approval to acquire a freehold interest in approximately 198 hectares of land located at Mokau Ridge Road, Puketi, Northland. The vendor was Tui Farms Limited New Zealand (100%); consideration was $1,090,000. The OIO states: “The Applicant is purchasing the property as a commercial forestry operation. The Applicant intends to develop, harvest and replant the existing forest located on the land”.
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.