Yili will acquire Oceania to access its land resource consents to build a plant over 38 hectares in South Canterbury, according to a notice on the Shanghai Stock Exchange on Dec. 18. The Chinese firm said it’s attracted by New Zealand’s relatively cheap raw milk and the prospect of the free-trade agreement with China completely removing Chinese import tariffs by 2020.
The plant is scheduled to be completed by June 2014 operating at 60 percent capacity, with annual full capacity of 47,000 tonnes expected in the 2016/17 year.
The deal is subject to Overseas Investment Office and Chinese government approval.
This will increase competition in the milk market which ought to help with OIO approval.
It will also attract the xenophobes who will complain about profits going overseas.
But the company plans to spend $214 building the plant which is a significant investment that will provide jobs.
It will be buying milk from local farmers and employing locals to process it. It will also be buying other local goods and services, paying rates and tax.
All of that will be good for the local and national economy.