Chinese remain keen on agricultural investment
Chinese investors and companies remain eager to invest in Australian agriculture, with vineyards, dairy and aquaculture named yesterday as the most popular sectors.
The Agri-Investor forum in Melbourne was told by Matthew Schofield, partner with pioneering Chinese accountancy business ShineWing, that his Chinese clients had not been deterred by reports of anti-Chinese investment sentiment.
Mr Schofield said Chinese investors wanted to be part of the story involving China’s growing demand for high-quality food, with Australia seen as a safe place to invest with high regulatory, biosecurity and environmental standards. A key appeal was that freehold land could be bought in perpetuity.
Mr Schofield described the avalanche of Chinese money in agricultural investment in Australia as “astounding”.
“Our prospective clients want clean and green gold standard (food); I call it the Louis Vuitton syndrome that we must protect at all costs,” Mr Schofield said.
“They want premium brands and think our food quality is fantastic and, like with Louis Vuitton [handbags], they are prepared to pay a significant premium for it.”
Mr Schofield said China’s worst kept secret, that its rivers, soils and water table were heavily polluted, was now out in the open.
He nominated vineyard investment as a continuing “hot area”, in line with the increased consumption of premium wines by wealthy Chinese and the high regard held for Treasury Wine Estates’ Penfold red wine labels.
Mr Schofield tipped the purchase of dairy assets — from farms to infant formula brands and processing plants — as the next wave of Chinese investment, as new import regulations and registration rules to be introduced in early 2018 became clearer and the desire to lock in Australian milk supply remained.
“I think seafood and aquaculture will be the next round; you only have to look at (Chinese companies) buying hotels and casinos around the world and to think about Chinese tourists loving their seafood to see that,” he said.
Former trade minister Andrew Robb, who sits on the board of the joint Chinese-Australian owned Kidman cattle empire and is advising the Seafarms Group on its $2 billion prawn farm project near Kununurra, said business deals between China and Australia were the key to the future.
He said the live export cattle deal recently signed by Hancock’s Gina Rinehart with the Chinese New Hope group, which will see Hancock export up to 800,00 cattle a year to feedlots and abattoirs on an island near Shanghai, was an example of such future agribusiness co-operation.
Source: The Australian Business Review. Date: 2017-06-22