Rural round-up

Chinese interest in Fonterra fund ‘predictable’ Feds say:

Chinese interest in investing in Fonterra’s Cooperative Group’s shareholder fund was predictable once the scheme was approved and underlines the need for constitutional protections for the Trading Among Farmers scheme, says the main farm lobby group.

China’s sovereign wealth fund, the US$400 billion China Investment Corp, is in talks to buy units in the $525 million fund with an investment smaller than US$100 million, the Wall Street Journal reported yesterday, citing people with direct knowledge of the plans.

The Fonterra Shareholders’ Fund aims to raise as much as $525 million selling shares in an indicative price range of $4.60 to $5.50 apiece, giving outside investors exposure to up to 7 percent of the dairy cooperative’s equity. The final price will be set by a bookbuild among institutions and NZX firms on about Nov. 27. . .

Huge bio-fuels opportunity for NZ from forestry: Pure Advantage -  Pattrick Smellie:

New Zealand’s plantation forestry estate represents a major opportunity for New Zealand to become more self-sufficient in transport fuels, says the latest report from the Pure Advantage business lobby group seeking support for a “green growth” push in New Zealand.

However, a “crisis of faith” in the forestry industry could stymie the newly emerging potential of forestry – a sector that has long confounded attempts to add value beyond the export of raw logs, mainly to Asian markets.

Pure Advantage trust chairman Rob Morrison told BusinessDesk the fragile state of the forestry industry is a major issue for realising the largest economic opportunity identified by a study conducted by London economic consultancy Vivid Economics and the Business School at the University of Auckland. . .

Icebreaker launches online shopping:

Icebreaker, the iconic merino clothing brand, will launch an online store in New Zealand today, at icebreaker.com– in time for Christmas shopping.

“It’s no secret that online shopping is the fastest growing channel in retail today, with clothing showing some of the highest growth,” says Jeremy Moon, Icebreaker CEO and founder.

“We’re a multi-channel business, and our new eCommerce site in New Zealand will complement our presence in retailers throughout the country and in our Icebreaker TouchLab retail stores in Wellington and Auckland. Our customers are increasingly demanding choice – they want to be able to choose to shop either directly from a brand, or from a retailer with a wide variety of brands.” . . .

Prince Charles inspects the Glacial Wool rug bearing his coat of arms:

New Zealand Wool Services International is pleased to make available the attached photographs of the Prince of Wales inspecting a unique six square metre Glacial wool rug bearing his coat of arms during his visit to the New Zealand Shear Brilliance wool exhibition at The Could in Auckland on 12 November. The rug has been commissioned by New Zealand Wool Services International to honour the Prince and recognise his role as a champion and patron of the global Campaign for Wool.

Golden rule

Quote of the day:

While it rankles to be beholden to the opinion of the same financial markets as caused the global financial crisis, the fact remains that we’re debtors, and the rules about what happens to those who don’t pay their debts haven’t changed. Pattrick Smellie

The golden rule still applies – those with the gold make the rules.

As long as we’re heavily indebted we’re at the mercy of those to whom we owe money.

The real threat

Quote of the day from Pattrick Smellie:

To the Greens and an increasingly hysterical band of Labour MPs with economic portfolios, this will be evidence of our capitulation to the wily Orientals. 

Sorry guys. The real threat is that China has plenty of other options.  It’s a big world out there, and Beijing is the most powerful economic force in the world today. 

As the Chinese Embassy’s urbane political counsellor, Cheng Lei, put it at a press briefing timed just before the Crafar announcement this morning, Fonterra is a big investor in China and is welcome.

The two countries could even grow two-way trade to $20 billion before the 2015 target formally set this week during the visit of fourth-ranked Communist Party official Jia Qinglin.

But only if we want to.

Trade is a two-way street. If we expect the Chinese to take from us we must also be prepared to give a little.

There are advantages to China in dealing with us. It enables them to dip their toe in the water of free trade with a country which doesn’t offer any threat to them.

But there are plenty of other countries they could buy from, it would take a lot of other countries willing to buy from us to replace the exports we send there.

Is Key a Level 5 leader?

. . .  there is in Key’s style – humble, gentle, willing to be wrong, but absolutely certain that New Zealand is a country that, in Jim Collins’s words, “deserves to last” because of all that it has built already – something of the Level 5 leader lurking.

This comes from Pattrick Smellie, you can read the rest of his column at Scoop.

My blue bias provides plenty of reasons for wanting Key to be a great leader.

But the benefits to New Zealand from great leadership are far more important than politics.