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LANDCORP HAS done another deal with the Chinese company Shanghai Pengxin – this time to help develop a giant sheep farm.
The Government-owned farmer and Massey University have signed a memorandum of understanding (MOU) with a Shanghai Pengxin subsidiary company, with Anhui Agricultural University, Anhui Anxin Husbandry Development Ltd and the local provincial government.
The signing came at the conclusion of a recent agricultural trade mission to China, led by Primary Industries Minister Nathan Guy.
Landcorp's chair Bill Bayliss and chief executive Chris Kelly, with Minister Guy, met the chairman of Shanghai Pengxin. Kelly says just 24 hours earlier, Shanghai Pengxin announced it had bought a controlling stake in a large Chinese dairy investment organisation.
"They are doing a capital raise and that's the vehicle that Shanghai Pengxin is going to use to grow their agricultural aspirations in Australia, New Zealand and probably South Africa. They have leased 10,000ha in Anhui Province from the Anhui governor and are going to develop a very large sheep flock."
The company already has some sheep just out of Shanghai but, says Kelly, has no expertise in agriculture and want help to develop that enterprise, hence the signing of the MOU with its subsidiary developing the sheep unit.
Kelly says the signing of the MOU will see the formation of a consultative working group involving Massey University, the two Chinese institutions, Landcorp and Shanghai Pengxin to develop the new sheep enterprise. The Chinese have about NZ$4 billion to spend on all its investments, so they are talking big numbers.
Landcorp will provide expertise in large scale farming and genetics. "At this stage we haven't fleshed out the plans yet. There has been no talk of dollars or numbers. The signing of the MOU is really the start of the discussion with these guys and where we will go from there."
Kelly says he got a lot out of the trade mission, seeing Chinese dairy operations in Inner Mongolia and better understanding Fonterra's aspirations in China.
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