Bright Food unit buys stake in NZ meat processor

New Zealand approved on Tuesday the sale of a 50 percent stake in the country’s largest meat processor, Silver Fern Farms, to a unit of China’s Bright Food Group, enhancing the South Island-based company’s access into the Chinese market.

The approval of the NZ$261 million ($191 million) deal is an encouraging outcome for Chinese investors, following a high-profile rejection and complaints over the slow approval process.

The Dunedin-based company had voted in October to allow Shanghai Maling Aquarius Co, a unit of State-owned enterprise Bright Food, to take a half-share in the firm and applied for approval from foreign investment regulators the same month.

Minister for Land Information Louise Upston, who approved the deal after it received the goahead from the Overseas Investment Office, said in a statement it would “put the company in a better financial position and allow it to increase its exports”.

Silver Fern Farms Chairman Rob Hewitt said the capital invested would allow the company to develop its brand and strategy.

The company is particularly focused on the China market, their biggest by volume, and can take advantage of Bright Foods’ supply chains and 8,000 Chinese supermarkets.

“It’s the fastest-growing protein market in the world so it’s going to bring significant benefit,” Hewitt said of Bright Foods’ involvement.

Chinese companies have in recent years been attracted to New Zealand’s agricultural sector as China seeks sources of high-quality protein to feed its fast-growing middle class. However, some Chinese investors have hit roadblocks from political opposition to foreign ownership of domestic assets.

In September 2015, the New Zealand government blocked the NZ$88 million purchase of a local farm by Shanghai Pengxin Group Co, despite the OIO approving the sale. The government said at the time they were not satisfied there would be “substantial benefit” to New Zealand.