CCM: CAHG acquires New Zealand's Mataura Valley Milk 09-01-2016

On 30 July, China Animal Husbandry Group (CAHG) officially announced the approval by the New Zealand Overseas Investment Office for its new powder plant in Gore district, South Island of New Zealand.

                                                                                          Source: Baidu

CAHG is a subsidiary of China National Agricultural Development Group Co., Ltd. (CNADG), a national group directly managed by the State-owned Assets Supervision and Administration Commission of the State Council. CNADG was established by the amalgamation of China National Fisheries Corp. (CNFC) and CAHG.

The group has total assets of USD2.3 billion (RMB15 billion) and operates 19 fully-owned subsidiaries, 3 of which have been listed on the Share-A market (the local RMB denominated equity market): China Animal Husbandry Industry Co., Ltd. (stock code: 600195), the controlling shareholder of which is CAHG, Zhongnongfa Seed Industry Group Co., Ltd. (stock code: 600313) and CNFC Overseas Fisheries Co., Ltd. (000798).

Group business activities span fishery, veterinary pharmaceutical manufacturing (vaccines and additives), seeds and seedlings, agricultural production (cattle, sheep and horse farming, crops for grains and oils and feeds), agricultural services (trade business, and insurances for agriculture) and agricultural machinery and engineering.

The plant is to be established on what is an empty site at present. The Southland region of South Island is certainly a good dairy area - it and Canterbury have been the areas of strongest growth over the last decade. CAHG is taking a 71.8% stake in Mataura Valley Milk Limited (MVM), the balance held by dairy farmers (20%) and by Hamilton-based dairy business Bodco which is effectively one and the same with Danpac, the idle canning and blending operation (5.6%).

The deal was rumoured in the New Zealand industry as early as mid-June at least, and widely reported there on 28 July. “CAHG’s participation will provide at least 100 new jobs and will help increase the exports of value-added products,” stated MVM, “This will have significant impact on the local economy.”

“CAHG will invest USD145.1 million (NZD200 million, NZD/USD exchange rate @ 0.7257 on 19 August, sourced on into constructing a plant, to meet the increasing demand for milk powder, especially for infant formula,” said  MVM; “In 2017, the sales of infant formula in China will reach USD37 billion. China shows strong demand of imported infant formula.

From March 2015 to February 2016, China’s imports of infant formula increased by 51% YoY (Notes: A trend which has continued until July). In addition, compared to the largely decreasing prices of world dairy products, the price of infant formula fluctuated over a comparatively small range.”

In addition to producing infant formula, the new plant is also designed to have UHT milk, butter and SMP capabilities. The plant is be constructed in October this year, and is expected to bring revenues of USD65.3 million (RMB90 million) to the local economy.


Prior to this, on 11 July, CAHG had already established a partnership with Shanghai Nouriz Dairy Products Co., Ltd. (Nouriz). Nouriz is an OEM brand, produced by Synlait Milk. It has no licensed plant and no R&D capability, threatening its future in the Chinese market. Some trade sources expected CAHG to build plant for Nouriz and to obtain an infant formula production licence so as to retain the brand. The planned plant in Gore seems to fit this bill.



This article comes from Dairy Products China News 1608, CCM


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