-
Originally Posted by Balance
Agree with you. That's why the Chinese bought it and why the farmer suppliers will support it.
But big risk for the Chinese as the farmers are not contractually bound to supply Westland as I understand the co-operative arrangements post the acquisition.
So the Chinese really do need to do a Synlait or Open Country Cheese, and pay more than Fonterra.
Picture this in you minds eye;
A Fonterra tanker conveying de-watered milk from their Stillwater concentration plant to Racecourse Hill stopped at a level crossing to allow a train to pass conveying the Peoples Milk from the Rolleston concentration plant to the Red Banner Collectives Hokitika factory.
Boop boop de do
Marilyn
PS. Not as nutritious as Yak milk produced by oppressed Tibetan peasants who yearn for the return of His Holiness the Dalai Lama.
Last edited by Marilyn Munroe; 19-03-2019 at 11:30 AM.
Reason: Added PS
Diamonds are a girls best friend.
-
Member
I'm trying to figure out what Yilis plan is here. They already have Oceania Dairy and from what I hear they have a full supplier book until they expand the plant. Westland do source from cantebury, they concentrate the liquid milk in Rolleston and ship it over the Alps for processing...`Current product mix for W D is the regular commodities but also IF base powder which they export offshore already.
I just cant see the big strategic win in paying so much.... perhaps having a larger IF base supplier within your own group of companies is worth it. But the Chinese do seem happy with loading their companies up with debt.....
-
Originally Posted by kiwidollabill
I'm trying to figure out what Yilis plan is here. They already have Oceania Dairy and from what I hear they have a full supplier book until they expand the plant. Westland do source from cantebury, they concentrate the liquid milk in Rolleston and ship it over the Alps for processing...`Current product mix for W D is the regular commodities but also IF base powder which they export offshore already.
I just cant see the big strategic win in paying so much.... perhaps having a larger IF base supplier within your own group of companies is worth it. But the Chinese do seem happy with loading their companies up with debt.....
For $250m they could have come to some arrangement with SML (or fonterra) to build further capacity in Canterbury . I can quite see the sense of carting raw material over the Alps and then carting it back again as finished product.
-
Appear to have well over-paid, not dissimilar to SFF 50% sale to Shanghai Maling. Net members funds are only $123m and if take their coop shares (treated as a liability) then only get $229m. Chinese play a longer game though...…but sale is not based on any sort of multiple of EBIT.
Westland have about the lowest payout in the industry over the last few years, so will have to pump up their payout to be competitive, and maintain supply on the coast. Fonterror have their factory at Darfield and while they have their own issues, would suspect they will be active trying to get supply.....
Might be a few new tractors/Rangers/Hi Luxs on the coast soon.
-
Originally Posted by minimoke
Hmmm. So how much would the Chinese pay for SML if there was an opportunity
Megabucks !!
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
-
Originally Posted by Balance
Wait till they pay $20-30 billion for A2 milk lol
-
The vast majority of Westland Milk comes from the West Coast and not Canterbury. WMP suppliers in much of Central and all of South Westland don't have any processor to sell to but Westland Milk Products. Unless there is major investment on the Coast by a competitor that situation is unlikely to change.
-
Member
Originally Posted by minimoke
For $250m they could have come to some arrangement with SML (or fonterra) to build further capacity in Canterbury . I can quite see the sense of carting raw material over the Alps and then carting it back again as finished product.
They are building a canning facility at Oceania, maybe this extra supply will help with utilisation %.
Still, I dont see the strategic long game in this....
-
Originally Posted by kiwidollabill
..... Still, I dont see the strategic long game in this....
Chinese investors have an eye to the long term, its what their Belt and Road initiative is all about. Whether NZ's water, or our milk, it's all about securing food supply and trade dependancy.
At a micro level it reads as a good deal for Westland farmers..... at a Macro level is it still such a good deal?
For those in doubt about the Chinese long game, check out this. China now has a 99 year lease on Australia's strategic Port of Darwin.
-
Originally Posted by Left field
Chinese investors have an eye to the long term, its what their Belt and Road initiative is all about. Whether NZ's water, or our milk, it's all about securing food supply and trade dependancy.
At a micro level it reads as a good deal for Westland farmers..... at a Macro level is it still such a good deal?
For those in doubt about the Chinese long game, check out this. China now has a 99 year lease on Australia's strategic Port of Darwin.
Interesting in Australia, where they are vertically integrating themselves - land, processing facility, domestic transport, transport infrastructure etc.
I was at a conference recently for a sector where has been significant Chinese investment (as well as from other countries). There was a Chinese presenter, employed by a NZ govt entity. There was a line they said, that went something like this: "China was the number one country in the World, but relinquished this in the last 100 or so years. It is intent on again being number one country in the world".
Wasn't any reaction from the audience.....
Last edited by Sideshow Bob; 19-03-2019 at 04:33 PM.
Posting Permissions
- You may not post new threads
- You may not post replies
- You may not post attachments
- You may not edit your posts
-
Forum Rules
|
|
Bookmarks