NZ First is not alone in worrying at the implications of a Westland Milk sale to Yili

Is   Westland  Milk   one of  NZ’s  “key  strategic assets”?

NZ  First  is adamant  it is and believes the government  should be a  applying a  “national interest test”   to the proposed  sale of the company  to the Chinese  dairy giant Yili.

Those  who  see  heavily indebted  companies  like Westland Milk struggling to  make a profit and  not  even  matching  Fonterra’s payout  to its suppliers might take a  cooler view  to  the proposed  sale.

Federated Farmers dairy chairman Chris Lewis said he had received “mixed” feedback from West Coast farmers on the deal, which will require 75% approval. Continue reading “NZ First is not alone in worrying at the implications of a Westland Milk sale to Yili”

Businesses seem gloomy but health-sector companies are in good heart

The PM, Jacinda Ardern, received what her handlers would have perceived  as  unexpected  criticism  from the  media   after   she gave  a pre-budget speech to an Auckland business  audience.  One of those  in the  audience  was   said to  have   described   it  as  an   “ideological fairytale”;  others   apparently  were  disappointed   it had  “nothing for business”.   

Given   she  did list  as   two of the five priorities  in the budget as   being “creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy; and supporting a thriving nation in the digital age through innovation, social and economic opportunities”,  the criticism itself  could be  regarded as  a    bit  “ideological”.

Surely   business  doesn’t  expect   government hand-outs,  even if  it  is labeled  a  “well-being”  budget?

But  there   seems  little   doubt    that   the   mood of  business  is downhearted   these  days.

Or is it  really?  Continue reading “Businesses seem gloomy but health-sector companies are in good heart”

Fonterra could learn lessons in enterprise and growth from Australia’s Wesfarmers

NZ  co-ops have been  getting  a  bad  media  rap   lately.  Take  Fonterra, for example.  Andrea Fox, one of the  country’s  best-informed journalists  specialising  in agriculture  issues,  started   a  new series in the  NZ  Herald  with the  headline:  “Fonterra: Disappointment and soured  dairy dreams”.

Noting   the dairy goliath had a silver-spoon  birth   nearly  18 years ago she  wrote:

Today the  co-operative  is looking a bit like  the family’s overweight, lazy teenager  hogging the remote  on the biggest couch in the room And the  credit card bills are coming in”.

After Fonterra posted a historic first net loss of $196m, Fox  says  calls  are heating up  for  the company to be split up  and a  company, perhaps  listed, spun off it, open to outside capital  investment to  chase  high-value product  markets. Continue reading “Fonterra could learn lessons in enterprise and growth from Australia’s Wesfarmers”

Yili bid for Westland Milk raises questions about dairy co-operatives – and Fonterra’s ownership

On  the face  of  it, it’s  a  no-brainer.  Weighed  down  with  debt,  Westland  Milk,  based in   Hokitika  is financially  on  its  knees.  Riding  to  its  rescue,  Chinese  dairy  giant  Yili  has come in with a  $588m buyout deal   which  will yield  $3.41  a share   to the co-op’s  farmer shareholders,  and, as well,   absorb  Westland’s debt and liabilities.

According to  Westland, the  nominal value of its shares  has ranged  from  70c  to $1.50  per share. For the  average-sized  Westland farm, the  share offer translates to  about half a  million dollars cash.

The offer  looks even  more attractive since  Westland had to  cut its  milk payout  forecast, while other  companies’ forecasts  are rising.  Westland, which has  grown out of  the West  Coast’s  150-year  dairy heritage, hasn’t paid  a  competitive milk price   for  several years.

The conditional  deal comes with extra  sweeteners. Yili has committed to collect all  milk  supply. It  will  also pay  a  competitive  price of at  least  as  much as  the  Fonterra  farmgate milk price   for  10  years.

But why  would   Yili   go that distance? Continue reading “Yili bid for Westland Milk raises questions about dairy co-operatives – and Fonterra’s ownership”

Comforting news for dairy farmers as companies report results and the world price rises again

Encouraging signs emerged this week that key elements in the structure of NZ’s largest export industry are whipping themselves back into the shape they should be.

The giant  co-op  Fonterra  has  gone back  into the  black  with a net profit of $80 million in the  first half,  after previously recording  a  net  loss of  $186m.

Meanwhile Westland Milk Products, NZ’s second biggest dairy co-op, is in line to be  sold  to China’s biggest  dairy company,  Yili,  in  a $588m  transaction that would inject nearly half a million  dollars into the operations of  each  of its  suppliers.

Alongside these co-ops, the Canterbury-based Synlait has underlined its strength in the  industry with a  solid result in  its half-year after  achieving   higher sales  volumes.  It reported a half-year net profit of $37.3m,  9.6%  lower  than   the  $41.3m  in the previous first   half,  but  with the  focus  on investing for  growth,  with a  second processing  plant due  to come on stream for  the  2019-20 season. Continue reading “Comforting news for dairy farmers as companies report results and the world price rises again”

Chinese organisations turn Aerospace aircraft into unmanned aerial vehicle

Hamilton’s Aerospace Ltd’s turboprop P-750 light utility aircraft has been developed into an unmanned aerial vehicle (UAV) in conjunction with a group of Chinese organisations for commercial and military applications.

The AT200 has been developed by Chinese company Star UAV with the Chinese Academy of Sciences’ Institute of Engineering Thermophysics and other Chinese state organisations.

Launch customer SF Express, a Chinese delivery services company based in Shenzhen, Guangdong, China, and the second largest courier in China will acquire three AT200 for testing and evaluation.  Test flights have already begun.

SF Express provides domestic and international express delivery.

The plan is to use the aircraft for unmanned cargo flights. The AT200 will carry 1500 kg over ranges of up to 2000 km.

Attracting interest from agencies outside China is how SF Express would integrate the AT200 into its intensive network of logistical support for the Chinese Peoples’ Liberation Army, notably its new network of militarised islands in the disputed South China Sea.

Aerospace developed the P-750 from the legendary Fletcher Fu24 aerial topdressing machine. It is in widespread use around the world for tasks ranging from light freight to sky-diving.

The company says its extremely short capabilities put it in a class of its own.

It is certified in the US as well as NZ and is supported by major US firms including Pratt & Whitney, engine-makers.

In  China    where    skydiving    has taken off  as   a  recreational  activity,  Aerospace’s  P-750   is used extensively   because  of its ability to carry up to 17 skydivers to jump height fast and effortlessly and to return quickly to pick up more thrill-seekers.

Last year the company was taken to court and fined $74,000 for breaking UN sanctions by shipping parts to North Korea.

Air NZ’s response to Christchurch tragedy: regional flights were grounded while its fares soared …

Move over Shane Jones – Grant Robertson might be keen to join you in assailing Air NZ for its appalling exercise in yield management at the weekend in jacking up round fares to Christchurch to $747 and $787.

It took a crisp call from Finance Minister Robertson, who holds Air NZ’s shares for the Crown, to boot common sense into the Auckland warriors who run the national carrier.

Fares were capped and compassionate fares made available.

Air NZ furthermore cancelled 17 regional services from Christchurch, saying, it was not possible to screen customers and their baggage.

But wait a minute.  Those flights (on ATRs and Q300s) aren’t screened anyway.

So, there must have been another reason.

Perhaps the police wanted to prevent possible accomplices stealing away on non-screened flights. Continue reading “Air NZ’s response to Christchurch tragedy: regional flights were grounded while its fares soared …”