Hong Kong-based He Run International Investment has revealed plans to build a dairy production facility on New Zealand’s North Island, with an investment of between NZD 70m and NZD 80m ($50.85m–$58.11m).
The factory in Otorohanga – 100 miles south of Auckland – will begin production next year and could be capable of processing up to 25,000 tonnes of infant formula every year. The site could also produce a number of speciality food products, such as cheese.
The move represents the latest in a series of Chinese investments in New Zealand. In 2013, Chaozhou-based Yashili International revealed plans to build a manufacturing facility for finished and semi-finished products in New Zealand, including base milk powder, which is set to be completed later this year. The trade has, in recent years, gone in the opposite direction too. In January, China’s Ministry of Commerce approved Fonterra’s bid to buy a 20% stake in Chinese dairy firm Beingmate for nearly $600m.
The new site responds to recent food scares surrounding infant formula, and 20% of its initial output will be organic. The quality of infant formula produced in New Zealand is perceived to be of higher quality by consumers in China.
“The industry standards for New Zealand are much, much higher than other countries, and that’s why [farmers] are getting paid a premium for [their milk],” He Run International minority shareholder David Carey told NZ Farmer. “The investors are tied to a huge chain of supermarkets, and they’ve got their own brand but they do want a very, very good supply of New Zealand dairy products.”
But members of New Zealand dairy cooperative Fonterra have called for greater unity amid the continuing Chinese investment. The fact that farmers can “proudly say it’s our company” should encourage them to remain loyal to the company despite increasing trade opportunities, Otorohanga dairy farmer Bruce Collinson-Smith said.
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