The Chinese take a long-term view of investment and must be rubbing their hands in glee at having played a bunch of farmers on the West Coast out of their co-operative, subject to Overseas Investment Office approval. Just like a lion hunting down its prey, they spotted weakness and went in for the kill.
“Absolutely stunning” is Katie Milne’s reaction to the vote by Westland Milk Products farmer shareholders to agree to the sale to Yili, the Chinese milk conglomerate one quarter owned by the Chinese government. She is a West Coast farmer and director of WMP.
WMP has been managed hopelessly for years now and as a reward for incompetent management, bonuses are to be paid to the management team when the deal goes through. The shareholders have chosen to focus on the short term and thus, not being willing to see beyond the end of their noses, have grabbed the deal with both hands.
So another key piece of New Zealand infrastructure falls into foreign hands, just like the 50 percent of Silver Fern Farms now owned by the Chinese and South Canterbury milk processor Oceania Gold, already owned by Yili.
What use is it in the long term to have such important parts of our economy hived off into foreign ownership?
Remember when prime minister Key said he didn’t want New Zealanders to become tenants in our own country?
The dairy farming sector is heavily indebted (obviously a large factor in this latest sale), owing some $40 billion to the banks.
Fonterra is licking its wounds at the moment and will be for some time to come.
How long will it be before the Chinese start circling around its door with another outsized offer the farmer shareholders of Fonterra will be unable to resist?
Source: The Gisborne Herald
