Chinese investments in Australian agriculture are generally controversial, but one Chinese company has remained immune to criticism, with plans to invest $ 1 billion by the end of the decade.
- New Hope Group has already invested in beef and dairy industries with deals worth $ 200 million
- China seeks overseas to meet domestic demand for beer, mutton and seafood
- Investment in Kilcoy Pastoral Company has created 130 new jobs in Queensland
In 2013, New Hope Group, China’s largest private food company, paid nearly $ 100 million for a controlling stake in Queensland’s export beef slaughterhouse Kilcoy Pastoral Company, and in 2015 it announced a $ 100 million deal with two of the country’s largest dairy farming families – the Moxeys and Perichs in New South Wales.
New Hope Group Australian CEO Nick Dowling said he suspected the company had gone unnoticed because it had not purchased land and assets directly, preferring to invest in local businesses.
“We invest in businesses, we don’t buy businesses,” he said.
“We are looking to work with great partners who have great companies where we can contribute our resources and market access to bring opportunities to life that companies would not otherwise have.
“It is about giving oxygen so that these companies develop.”
New Hope Group chairman Liu Yonghao, one of China’s richest men, plans to invest $ 1 billion in Australian agriculture by 2020.
Mr Dowling said the group has yet to close its checkbook and is looking for new investment in top-quality food operations, from lamb to aquaculture.
“I don’t think there is necessarily a limit to what the president wants to invest in, it’s really a question of timeliness.”
A sign of New Hope’s long-term commitment to Australia came late last year with the opening of the company’s new Australian headquarters in Sydney.
The president’s rags to the life of riches
Mr. Liu 65 years old, is revered in China because of his extraordinary life history from rags to wealth.
In 1982, he and his three brothers sold a watch and a bicycle to raise the equivalent of AU $ 150 to grow quails.
“My parents were not civil servants, my relatives were not rich, so it was all up to me, I just wanted to change myself, to change my life,” he said.
New Hope Group is now a global animal protein powerhouse with 70,000 employees working in 600 companies around the world.
In China last year, it processed 1 billion ducks and chickens, 3.5 million pigs, sold 20 million tonnes of animal feed and produced 400 million tonnes of milk.
According to the Forbes China Rich List, Mr. Liu and his family were worth $ 4.5 billion in 2016.
Mr. Liu began to take an interest in Australia four years ago.
“The air and water in Australia is very good, the treatment plants are more standardized, and the supervision of the Australian government is also strict,” Liu said.
Mr. Liu said China cannot meet the domestic demand for beef, mutton and seafood and has to look abroad.
“So we thought about where to find these resources and finally we found out that Australia is a nice place and then we sent a task force to investigate in Australia,” he said.
Job growth thanks to the beef exporters agreement
The first investment in the Kilcoy Pastoral Company (KPC), an hour north of Brisbane, created 130 jobs.
“[The deal] enabled us to replace older assets with newer, more contemporary ones and began to pave the way for future growth, ”said KPC CEO Dean Goode.
“For the local community this has been huge, and as the investment materializes we will see more jobs created.”
Mr. Goode said having a well-known Chinese partner had been invaluable, saying “doors are opening” to opportunities.
“The name of New Hope has given us access not only in China but in the world to financiers, business partners or future customers or suppliers,” he said.
“They showed a willingness to work with businesses, not work on businesses, and actually allow those businesses to grow.
“It’s almost unbelievable to go from where Mr. Liu was in 1994 to where he is today with over 70,000 employees, $ 15 billion in annual sales, all from of quail farming.
“It’s pretty amazing, and if that doesn’t inspire people, nothing will.”
“We can take this company where we want”
The $ 100 million dairy deal came at the right time for the Moxey family, who were looking for an outside investor to expand their 3,500 cow farm in Gooloogong, central New South Wales.
“It’s still the dream, isn’t it?” – boost your business and take it where you want, and now we are in a situation where we can take this business where we want, ”said Managing Director Quentin Moxey.
$ 30 million has been invested in Gooloogong over the past 12 months to buy a nearby farm and increase the number of cows by 2,000.
A new 24-hour dairy has been built as well as two new American-style cow barns with a capacity of a thousand heads each.
The workforce is now 150 and will increase because the partnership plan plans to milk 10,000 cows by 2021.
“We want to expand the scale. We want to build one, two, or even more ranches,” Liu said.
“We founded a joint venture, not to buy [it], but to cooperate and develop together. “
The Moxeys produce 80 million liters of milk a year, and as the supply of milk increases, they will seek other markets, potentially overseas.
Allay fears about foreign investment
Liu said the Australian government has been sympathetic to its investment ambitions.
“Australian governments are good, they welcome Chinese and international investors as long as investors bring benefits to the Australian people, they will support them,” he said.
Mr. Liu said he will continue with the co-investment investment model in Australia.
“I have found a lot of investments made by Chinese companies in Australia, they have acquired this, or acquired that, but in this scheme, if we can grow with Australian partners, isn’t it much better?
“Australians are very smart. Isn’t it better that we cooperate with them?”
Mr Dowling said the company is working with local communities to dispel any doubts about Chinese investments.
“It is absolutely essential for us to make a positive contribution to the Australian community,” he said.
Watch ABC Landline’s 90-minute special China window at noon on Sunday, February 5.