By Paul McBeth
Jan. 31 (BusinessDesk) - An unnamed Swedish institution has been cleared to buy eight Waikato dairy farms from local billionaire Graeme Hart's Carter Holt Harvey by the Overseas Investment Office.
Southern Pastures Limited Partnership was given a green light to buy 3,205 hectares of land in December for an undisclosed sum, according to a decision summary published today. The farms have been for sale since 2010, when Carter Holt put 29 farms of converted forestry land up for sale, asking $224.5 million.
The entity is 99 percent owned by a Swedish institutional investor and 1 percent owned by Southern Pastures Management, the LP's general partner which will operate the farms, spokesman Cedric Allan told BusinessDesk. The structure of the fund lets institutional investors get direct exposure to local farms, which are operated by the local manager.
Southern Pastures Management is headed by dairy farmer and former All Black captain Graham Mourie.
The dairy group plans to bolster production through increased capital expenditure, sound farming practices and good management, according to the summary decision.
The local group has no plans to get into milk processing, and will continue to supply Fonterra Cooperative Group, Allan said. He declined to comment on production targets.
As part of the purchase, there is forestry land that still needs to be converted, providing instant opportunities for Southern Pastures to improve its production, Allan said.
Foreign investment in farmland, particularly by the Chinese, has been a point of contention in recent years, and ultimately led to tighter controls on the sale of farmland. That's seen two Chinese milk players, Yashili International and Inner Mongolia Yili Industrial, put their efforts toward securing processing facilities in New Zealand.