The $14 billion New Hope Group, the largest agribusiness conglomerate in China, opened its first office in Australia last week and has announced the group’s plans to invest $1 billion in Australia’s agricultural, food processing and real estate development sectors in the next three years.
As part of its strategic goals, the group has also named Goldman Sachs veteran, Nick Dowling, as the newly appointed chief executive of its new Australian and New Zealand businesses, according to Food & Beverage.
“I would like to think the next six to twelve months there will be plenty of opportunities for us, and we’ll certainly be actively participating in the industry,” Dowling told reporters.
Recently, there has been populist and political pushback over the proposed acquisition of Australian agricultural and food holdings by Chinese businesses and investors. Despite this, Liu Yonghao, the billionaire founder and chairman of New Hope Group, feels that the group’s presence in Australia’s ag sector since 2013 has brought it a level of acceptance from the Australian government.
Over the past three years, New Hope has made capital investments to bring capacity at the Kilcoy abattoir, the country’s fourth largest that New Hope acquired in 2013, from 240,000 head of cattle per year to more than 500,000 head through the addition of new processing lines. It has also invested more than $100 million for a majority stake in Australian Fresh Milk Holdings (AFMH) – a joint venture created with Australia’s Perich and Moxey families and Freedom Foods to acquire and expand Moxey Farms, the dairy businesses of the Moxey family.
“By our investments here we have shown to local authorities that we bring more jobs, employment, market opportunities, capital and tax — and that we invest in our business to grow and expand with our local partners,” Liu told The Australian, adding, “We are very confident about investing in Australia.”
The partnership strategy New Hope used for the pursuit of the Australian Fresh Milk Holding deal is one it plans to use in other agricultural sectors in Australia.
“We are focusing on finding strategic partners that we can invest in and together grow bigger and stronger,” said Liu, “often the biggest limiting factor here is scale.”
Another reflection of the group’s gradual integration into the fabric of Australia’s agricultural sector is its inclusion in the join Australia-China ASA 100 group led by Australian beef and mining magnate, Andrew “Twiggy” Forrest and the group’s approval to establish a bonded China-Australia food and ag Free Trade Zone on Zhoushan Island across from the Gulf of Shanghai.
Looking to the future, Liu envisions the export Free Trade Zone being a food processing hub where food companies like New Hope in Australia can ship their agricultural products to the island for processing before being then shipped to China, or other overseas markets for retail sale.
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Lynda Kiernan