23 Feb 2012

Shanghai Pengxin won't be put off by more legal challenges

6:10 am on 23 February 2012

A spokesperson for the Chinese company signed to buy the Crafar farms says it won't be put off by further legal challenges.

A New Zealand farm and iwi group that's trying to block the sale to Shanghai Pengxin has now lodged an appeal.

It has already obtained a High Court ruling forcing the Government and the Overseas Investment Office to review their approval of the Chinese application, using a different economic benefit test.

The group has also asked the Court of Appeal to reconsider its other argument against the sale: that the Chinese do not have the qualifications required to run dairy farms.

But Shanghai Pengxin spokesman Cedric Allan says the company has spent more than a year trying to buy the 16 farms and it will see the process through.

He says the company is in for the long haul and believes the other group are playing for delay.

Mr Allan says Shanghai Pengxin remains confident the OIO and the Government will reaffirm their approval, despite the New Zealand group's contention that it has more to offer.

He says the New Zealand group hasn't done due diligence on the properties so he doesn't know how they can make promises about the levels of production that they can achieve.

Mr Allan says Shanghai Pengxin will be involved in processing with a local company or companies producing consumer products which Shanghai Pengxin will market in China with an initial budget of $100 million.

He says this puts the New Zealand dairy industry at the top end of the market in China supplying branded consumer products to supermarkets, instead of selling the bulk of New Zealand's milk overseas in the form of milk powder.