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  1. #41
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    Anyone thinking Chinese investment is a home run for Chinese access should look carefully at the sequence of Bright Investment in Synlait Milk and its insistence on control even when dropping under 50% shareholding. And the aggressive takeout of shareholders in Synlait Farms provides equally little ground for optimism for long term future of a farmer partnership with a large corporate shareholder.
    Quote Originally Posted by Sideshow Bob View Post
    Investment is one thing, but control is another. If they give away control, think farmers will vote with their feet.

  2. #42
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    How does an Investor get control and still be confident the farmers will supply. An interesting set of interests to negotiate through.

  3. #43
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    Quote Originally Posted by 1leon View Post
    Anyone thinking Chinese investment is a home run for Chinese access should look carefully at the sequence of Bright Investment in Synlait Milk and its insistence on control even when dropping under 50% shareholding. And the aggressive takeout of shareholders in Synlait Farms provides equally little ground for optimism for long term future of a farmer partnership with a large corporate shareholder.
    A farmer grows stuff to sell.

    A corporate farmer generally looks at vertical integration. In the case of SFF, from the pasture to the plate. In the case of Exxon, from the oil well to the petrol pump.

    It allows for much closer control of costs, and provides options as to where the profit can be made or declared.

    It is not easy to see the interests of farmers and corporate farmers aligning closely over time.

  4. #44
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    Farmers want the best price for their sheep and cattle and the best profitability of SFF. How could it be achieved? Who forced SFF borrowing so much? Farmers, not foreign investors!

  5. #45
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    Quote Originally Posted by GTM 3442 View Post
    A farmer grows stuff to sell.

    A corporate farmer generally looks at vertical integration. In the case of SFF, from the pasture to the plate.

    It allows for much closer control of costs, and provides options as to where the profit can be made or declared.

    It is not easy to see the interests of farmers and corporate farmers aligning closely over time.
    Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.

  6. #46
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    Quote Originally Posted by 1leon View Post
    Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.
    Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

    SFF grow the beasts, process them, sell them to Bright, who move them through to retail.

  7. #47
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    Quote Originally Posted by 1leon View Post
    Neither Shanghai Maling, the now revealed purchaser, nor SFF seem to fit corporate farming in that neither company actually owns farms. However your comment as to options as to where the profit can be taken seems to fit well with both Bright and Shanhai Maling retail and wholesale distributing operations. Somewhat surprisingly with Synlait Milk, Bright did not seem to give any advantage to Synlait when NZ powder exporters were subjected to banning and later individual approvals.
    Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

    SFF grow the beasts, process them, sell them to Bright, who move them through to retail.

  8. #48
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    This reminds me of the "old" days in the meat industry when overseas firms such as the Vesteys and Borthwicks had a large measure of control of the NZ industry. They, too, had the overseas contacts for distribution and sale to the consumers of the product. The wheel turns?

  9. #49
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    Appairs to be good for farmer shareholders now for the short term,longer term ??? Who would know
    http://www.interest.co.nz/rural-news...-banks-plus-it

  10. #50
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    Quote Originally Posted by GTM 3442 View Post
    Have a look at how the Gulf monarchies are buying up Africa to ensure food security.

    SFF grow the beasts, process them, sell them to Bright, who move them through to retail.
    SFF doesn't own the farms. How then does SFF grow the beasts? The reality is the farmers own the farms and operate SFF as a co op to do the processing. Shanghai Maling/Bright is proposed to own half the processing and already has enormous retail and wholesale operations in China. As one commentator points out SH/Bright could still sell SFF products without owning half it. The question is whether the advantage Shanghai Maling sees in a stake in the processor will be consistent with the farmers interests in the long term.

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