Source: Stuff
A Fonterra shareholder has encouraged his fellow co-op farmers to remain loyal to their local, as Chinese investors throw more options on the dairy table.
Hong Kong-based company He Run International Investment is the major shareholder in a new dairy factory planned to start taking shape in Otorohanga in August, and is ensuring “competitive” rates for suppliers.
Otorohanga dairy farmer Bruce Collinson-Smith has been a Fonterra shareholder “forever” and said the co-operative was an asset that needed to be guarded.
“We can proudly say it’s our company and that’s the thing about it. We’re shareholders and it’s ours.”
Collinson-Smith said he hoped local suppliers would remain loyal to Fonterra, despite the drop in share values and a disappointing payout.
“It was just 12 months ago we had a record payout year, and it’s amazing how people can change attitudes in a year.
He admitted the new options may look tempting for farmers, but said there were “so many unknowns” with a new, offshore company.
“I’m really quite gobsmacked at some of the attitudes and short-sightedness of it, some people saying ‘I’m threatening to leave’, and I can’t understand it all.
“Sure [Fonterra] haven’t performed and with this organic milk factory, it’s an opportunity and people are down … but for rural New Zealand this is an employment opportunity, so it’s good for a town … but it will be disappointing for Fonterra.
“Sometimes it doesn’t perform but you hope it turns around and does perform.”
He didn’t like the fact unknown, offshore names were behind the company, and questioned why they chose Otorohanga.
“Who actually is behind the company, I don’t know who’s backing it and what’s their reason for it going down in Otorohanga. I don’t know of any organic farmers in Otorohanga.”
Kiwi minority shareholder David Carey said Otorohanga was chosen because of its water supply.
“We struggled to find any council which had the resources which Otorohanga had … water, gas electricity, the ability to take effluent in times of rain… without that and without the backing of the council we couldn’t do this operation.”
Waikato District mayor Allan Sanson said Waikato was the “post card” for dairying around the world which made it a natural landing pad for companies like these.
Sanson wasn’t worried about any competition to Fonterra, saying the Kiwi co-operative is geared to producing “faster” commodities like butter and cheese, which could be made quickly when billions of litres of milk were pumping through its factories.
He also said he the fact that the majority of profits would be heading offshore was no different to what was already happening at New Zealand banks.
“People need to get real about this.
“I don’t like to see profits go offshore either but at the end of the day the profit to the country is around the value added the employment and what it actually brings to the region and the country. ”
Hauraki District Mayor John Tregidga said the economic benefit of the factories was significant for small communities, and the Government had encouraged overseas investment.
“It’s a real good – not only economic boost, but also a confidence boost for our communities.”
“It not only helps job creation, but house prices, there is just a big flow on effect. It’s not only the increase in commercial rates that we’re getting from this but also anyone that’s moving into the area.”
Tregidga said development had just begun on 50 property sections in Ngatea, which was triggered by the new factory, and the factory would require a wastewater plant.
Tregidga said while more infrastructure as required, that could be managed.
“At the end of the day they’re buying milk off our local suppliers [such as Fonterra and Open Country].
“It’s big on export earning…where is the disadvantage? I don’t get it.
“The NZ government has been encouraging overseas investment and I’m absolutely supportive of it.”
