Allowing a China state-owned company to be the majority owner of a Southland milk plant is economic lunacy, New Zealand First leader Winston Peters says.
Dairy company Mataura Valley Milk announced yesterday it would build a $200million factory near Gore in partnership with China Animal Husbandry Group.
The Chinese firm will hold 72 percent of the company, 20 percent will be held by Southland dairy farmer suppliers and institutional investors the rest.
Mr Peters said New Zealand would be a major player in the milk infant formula industry - while not being a major owner of it.
"When will this country learn that the way for us to advance our interests is to do what other countries do - keep control of the ownership and the added value to the benefit of their economy and their workers."
The government should have stepped in to ensure the money was available for this sort of developemt - such as by using the Superannuation Fund.
But Gore District Mayor Tracy Hicks said the plant would provide a huge opportunity for the rural area and help bring jobs and growth to the district.
"In an ideal world it would be wholly New Zealand owned and operated but we don't live in an ideal world.
We've got to make the best of what opportunities come along and this I think is absolutely massive for Gore district.
"It's the largest investment that we've had in new industry for at least two decades."
"Like most of rural New Zealand, Gore faces a real challenge around demographics and we need more opportunities for jobs."
Mataura director Aaron Moody said yesterday the plant was designed to tap into the growing global demand for nutritional powders, especially infant formula.
The pharmaceutical-standard plant will produce infant formula, ultra-high temperature (UHT) cream and small amounts of skim milk powder, using locally sourced raw milk for global markets.