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Application for lifestyle property in Otago refused In a rare occurrence, an application for the acquisition of a lifestyle property in Otago has been refused by the OIC. Details of vendors, precise location, land involved and price have been suppressed. The would-be purchaser, United Estates Ranch Ltd, is owned by Alison Ruth Creighton, Stephanie Lynne Valentine, Timothy Paul Creighton (33% each) and Norman P. Creighton (1%). Despite his nominal shareholding, "the company is the vehicle through which Mr Norman Creighton carries out his New Zealand investments". The purchase was declined: "The property was being purchased for use predominantly as a holiday home for the applicant. Such purchases are not normally in the national interest." Which is a strange turnaround: there have been regular approvals for similar purchases in the past. Waste Management collects Waste Care from French owner Waste Management NZ Ltd, owned 60.1% by WMX Technologies Inc of the U.S.A. and the balance in shares listed on the New Zealand Stock Exchange, has approval to acquire Waste Care Ltd from SITA S.A. of France. SITA is owned 63% by Suez Lyonnaise des Eaux of France and the balance by residents of France. The price was $115,000,000. While the OIC approved the purchase without a care in the world, the Commerce Commission was less forthcoming. After the acquisition was first announced in March 1999, the Commerce Commission ruled against it. In a decision announced on 14/5/99 (media release, 1999/62 "Commission declines to clear Waste Management to acquire Waste Care") it said that it "was not satisfied that Waste Management would not acquire or strengthen a dominant position in the Auckland regional market for disposal of solid, non-hazardous waste. This is, in effect, the regional market for landfills." It continued: "The proposal would result in Waste Management owning two of the four landfills in the region, Redvale and Whitford. However, the two competing landfills, Rosedale and Greenmount, will be full and closed by 2003. Meanwhile Redvale could remain open for another 25 years and Whitford for another 17. If there was no new entry Waste Management would have a monopoly in this market within four years. The Commission found that barriers to entering the market are high because of the scarcity of suitable sites, Resource Management Act constraints and the high costs of developing a landfill. It concluded that new entry to this market would be neither likely nor sufficiently timely to constrain a combined Waste Management/Waste Care. It also concluded that alternatives to landfills, such as recycling and incinerators, are unlikely to constrain Waste Management if the proposed acquisition were to go ahead." However it found that in the nine other relevant markets affected, dominance would not be acquired or strengthened. Those other markets were:
Waste Management feigned surprise, quoting competition from Onyx, Fulton Hogan, and Envirowaste Services, plus many small operators. It said the Commerce Commission had based its ruling on "perceived future dominance" rather than on the current position (Press, 18/5/99, "Waste Care bid proceeds", p.27). It went ahead with getting shareholders’ approval anyway, and reapplied to the Commerce Commission, this time offering to divest "certain assets". What that divestment was, has not been disclosed other than that the Commerce Commission reversed its previous decision saying the "divestment involves certain contractual rights that would facilitate the availability of waste volumes to landfills not owned or operated by Waste Management. The terms of the divestment are commercially sensitive and confidential." (Commerce Commission Media Release 1999/69, 9/6/99, "Commission clears Waste Management to acquire Waste Care subject to divestment"). The Commerce Commission’s decisions describe the two companies as follows: Waste Management and its subsidiaries operate in the waste industry providing a range of refuse collection, recycling, treatment and disposal services in a variety of localities around New Zealand. It has solid waste operations in Auckland, Whangarei, Bay of Plenty, Rotorua, Gisborne, Whakatane, New Plymouth, Wanganui, Wellington, Christchurch, Timaru, and Dunedin. Its disposal division operates the Redvale Landfill at Dairy Flat on Auckland’s North Shore, and has an involvement as a joint venture partner in the Pikes Point transfer station at Onehunga, in Auckland. It operates refuse transfer stations situated at Hamilton City, Thames/Coromandel, Rotorua, Tauranga, Papakura, Whangarei, South Taranaki, and Rangiora. It also hauls waste from transfer stations that it owns or manages to landfills for final disposal. Waste Care and its subsidiaries also operate in the waste business providing a range of refuse collection, recycling, treatment and disposal services. It has solid waste operations, and operates in Auckland, Whangarei, Hamilton, Napier/Hastings, Palmerston North, Wellington, Christchurch and Dunedin. Waste Care’s disposal division operates the Whitford landfill in South Auckland and a refuse transfer station in East Tamaki. It lists as other major parties:
Its decision approving the acquisition by Waste Management was based wholly on the likelihood that a new landfill being planned by EnviroWaste at Hampton Downs, "the only landfill of sufficient scale to effectively constrain the merged entity, will proceed in a timely manner and is likely to be operational within the five year timeframe under consideration." That relies, among other things, on an assurance by Waste Management that it supported the development of the new landfill and thus would not unduly delay it by objections (which it has already lodged) with Environment Waikato. If there are delays greater than anticipated, whether or not caused by Waste Management, then Waste Management will have a landfill monopoly after Greenmount and Rosedale Road close. Its decision that Waste Management would not be dominant other than in Auckland relied on the view that the many very small rubbish collection operators in other centres provided sufficient competition, despite evidence that there was a very high failure rate amongst them. For example, a comparison of the Auckland Yellow Pages listings for 1990 and 1999 showed that, excluding Waste Management and Waste Care, only nine of the 106 listed in 1999 were also listed in 1990, an attrition rate of 91.5% in nine years. Indeed some submissions to the Commerce Commission pointed out that the successful ones were taken over by Waste Management or Waste Care. Waste Management had listed ten acquisitions in the last three years. Under the Commerce Commission’s guidelines this was not sufficient for it to be concerned. What is clear though, is that Waste Management, while not technically dominant in the way that the Commerce Commission defines it (about 40% of the market, or about 60% of the market with no single competitor having more than 15%), it will still be a giant amongst pygmies in most regions. Adding to that its U.S. parent’s record of dishonesty, environmental wantonness and anti-competitive behaviour creates considerable cause for concern. Between 1980 and 1992 the U.S. parent paid more than US$80 million in fines, penalties and settlements in criminal and civil cases in the U.S. In a court case in December 1996, a federal judge in Tennessee ordered it to pay more than US$90 million saying "fraud, misrepresentation and dishonesty apparently became part of the operating culture" of the company. It has fallen foul of the "good character" or "bad boy" laws of a number of U.S. states. For example, Indiana refused a permit to a Waste Management subsidiary, an associate attorney for the city of New Haven saying the state "would have to grant a permit to Satan before they could grant a permit to this outfit" (Indianapolis Star, 14/6/97, "Company Loses Bid to Expand Landfill"). Here in Aotearoa, in May 1995, an Auckland judge fined Waste Management $25,000 in relation to the death of one of its operators, censuring it for sticking to "inadequate" U.S. safety standards. At the time, it was the largest fine imposed on a company for breaching health and safety laws (New Zealand Herald, 31/5/95; Press, 31/5/95, "Company fined $25,000 after worker’s death", p.7). Earlier that year, the company "offered" to withhold threatened court action if the Christchurch City Council entered into a joint venture with it. Councillor Garry Moore (now Christchurch Mayor) said: "I believe that we are being subjected to the threat of litigation to get a commercial advantage. Anyone who threatens a city council with that should be told to go to hell" (Christchurch Star, 22/3/95). Last year the company achieved its objective of a joint venture with the Christchurch City and other Canterbury councils to establish and operate a new regional landfill. It is now in the middle of a high level controversy as to the location of the landfill, in which the Prime Minister, Jenny Shipley, has become involved. Not that the former parent of Waste Care is any better. See our commentaries on Suez (sounds like sewers) Lyonnaise’s original purchase of Waste Care in March 1998, and on Lend Lease (a partner with Suez Lyonnaise in the Sydney water scandal last year) taking 25% of Morrison & Co, manager of Infratil, in the March 1999 decisions. United Water tenders for Hutt wastewater plant United Water International Pty Ltd, owned 47.5% by Vivendi Societe Anonyme of France, 47.5% by Thames Water Plc of the U.K., and 5% by Halliburton Dresser of the U.S.A., has approval to acquire a licence over eight hectares of land at Seaview Road, Lower Hutt for an unspecified amount. "United Water, together with Downer Construction (New Zealand) Ltd and Black and Veatch International Company, has submitted a joint tender to the Hutt City Council to undertake the design, construction, commissioning, operation and maintenance work of a new bulk wastewater treatment plant and operation and maintenance of an existing wastewater milliscreening plant both at Seaview, Lower Hutt. If successful, United Water will occupy the Seaview site by virtue of a licence of the nature which constitutes an interest in land. The land will continue to be owned by the Hutt City Council." United Water already runs the water supply for Papakura District Council (see our commentary on the July 1997 decisions of the OIC). Papakura’s missionary zeal in contracting out – its water supply being only one example alongside refuse, landfill site, library, aquatic centre and others – attracted the praise of government and Business Roundtable ideologues, but not apparently its electors. The council that was responsible was thrown out in the 1998 elections and the new council is grappling with the mess left behind, handicapped by almost irreconcilable conflicts with the re-elected mayor. Rate rises initially threatened to be 42%, but were reduced to "only" 27% (New Zealand Herald, 2/5/99, "Political Infighting shows no sign of abating"). Papakura residents’ cost increases didn’t stop there: anticipating large increases in water bills from Auckland local body owned retailer Metrowater and wholesaler Watercare, United Water took the lead. Taking the opportunity to raise charges on the expiry of its initial two year mandated price freeze, in late June, United Water announced an 11.3% rise in water and sewage bills – a rise of $48 a year, to $474, for an average household using 190,000 litres of water. It claimed its water charges would remain the lowest in the region, though its sewerage charges would not (New Zealand Herald, 24/6/99, "Papakura water, sewage bills up 11pc", by Mathew Dearnaley). Vivendi is the trendy new name for Compagnie Generale des Eaux Societe Anomyne (CGE), one of the two largest water companies in the world, the other being Suez Lyonnaise (see above), also of France. Both are highly diversified into many different services and are expanding rapidly. Both have extensive records of price gouging, dubious business practices, and convictions for corruption amongst senior executives. Vivendi also owns Onyx, which runs refuse and other services in Whangarei, Auckland, New Plymouth, Wellington, Christchurch, and Dunedin. Vivendi’s international record of investigations for corruption include:
Thames, one of the privatised water companies given a 25 year monopoly by the Thatcher government in 1989, also has overseas contacts in China (with P&O) and South Australia (again in partnership with Vivendi). Water remains a highly contentious issue in the U.K. because of the enormous profits made and poor service from the new owners. See our commentary on the July 1997 Papakura decision for further details. Colonial sets up property investment trust The Colonial Group has approval to set up a listed property investment unit trust, Colonial First State Property Trust. The trustee will be Perpetual Trust Ltd, and it will be managed by Colonial First State Property (NZ) Ltd. The trust owns fourteen properties in Auckland, Wellington and Christchurch, mainly outside their Central Business Districts. Some were bought from companies in the Colonial Group, and some from outside it. Those approved are (excepting at least one suppressed from the purchase from Symphony Group Ltd) as follows: Prudential Assurance Co. New Zealand Ltd, Prudential Trustees Ltd, and Colonial
Mutual Life Assurance Ltd (all owned by Colonial Ltd of Australia) sold for $81,930,000, and
for $10,740,000. Also
(Note: The OIC does not explicitly give the ownership of Bancorp, but the Press [20/4/99, "Bancorp in new hands", p.25] notes that shortly after the above sale of Fifty-Six The Terrace Ltd was approved, three of Bancorp’s directors bought out the 47% shareholding of Public Bank Berhad of Malaysia.) Colonial expected to raise $145 million from the listing of the units in the property trust. Of that, $100 million was to come from the public float, and $45 million from itself, giving it 31%. The price of $1.00 per unit was slightly more than the net asset backing of 97.24 cents a unit, but the float was aimed at smaller investors who Colonial apparently expected not to worry about such niceties, in favour of a 10.3% initial yield. In the event, Colonial had to buy most of the units itself: only 54% of the public offering was subscribed for, leaving Colonial with $91 million to find (Press, 7/5/99, "Colonial Prop Trust appeals", p.35; 2/6/99, "Colonial issue out of favour", p.29). Newmarket Property Trust buys AA Centre in Auckland 99 Albert Street Ltd, which is owned by the New Zealand Guardian Trust Ltd has approval to acquire the AA Centre at (you guessed it) 99 Albert Street, Auckland, for $21,100,000 from Indovest Realty Ltd of Malaysia. The ownership of 99 Albert Street Ltd is given as 25.65% the Commonwealth Bank of Australia, 10% Grant Samuel and Associates Ltd of Aotearoa, 8.55% the ASB Community Trust of Aotearoa, and the remaining 55.8% the "New Zealand Public". In fact however, the OIC tells us that the company is owned by New Zealand Guardian Trust Ltd, which acts as corporate trustee on behalf of Newmarket Property Trust. However it appears that while this may be formally true, 99 Albert Street Ltd is held by New Zealand Guardian Trust on behalf of Newmarket Property Trust (90%) and Grant Samuel and Associates (10%). Newmarket management saw the purchase as a consolation prize after they failed to convince shareholders to approve a merger with the National Property Trust in March 1999. A 90% holding in the AA Centre was announced in March 1999; the other 10% is presumably that held by Grant Samuel and Associates. Though the price Newmarket paid valued the building at $21.1 million, it immediately had the property revalued to $25 million by transnational real estate company, Richard Ellis (see our July 1998 commentary). The directors saw the purchase as diversifying the company’s assets, and reducing its reliance on a guarantee of a minimum yield of 9.5% given by Sovereign Assurance (see below) to entice shareholders to invest in the company. Newmarket has had a poor track record since listing in 1994, culminating in a loss in 1998. Newmarket Property Trust is owned 40.07% (though apparently only 38% at the time of this transaction) by Metropolitan Life Assurance Company of NZ Ltd, a subsidiary of Sovereign Assurance. Since November 1998, Sovereign has been owned by the ASB Bank, which in turn is 75% owned by the Commonwealth Bank of Australia and 25% by the ASB Community Trust. (Ref: Newmarket Property Trust company announcements 29/3/99, 6/4/99, and 14/4/99, and Datex investment and financial profiles.) At the time of this purchase, New Zealand Guardian Trust was owned by Tyndall Australia, itself a subsidiary of Ron Brierley’s takeover vehicle, Guinness Peat. However, in June 1999, Tyndall itself was taken over by Royal and SunAlliance of the U.K. and New Zealand Guardian Trust was merged with Royal and SunAlliance’s existing funds management operation (Press, 5/6/99, "Funds managers merge", p.26). Kiwi Income Property buys Countdown and Farmers property for Northlands Northlands Retail Precinct Ltd, a subsidiary of Kiwi Income Property Trust, has approval to acquire the land and buildings of the Countdown Supermarket and Farmers Warehouse to expand the adjacent Northlands Shopping Centre in Christchurch, which it owns and operates. Kiwi Income Property, which is 25% owned by "persons who may be ‘overseas persons’", is buying the property from General Distributors Ltd, which is 57.96% owned by Foodland Associated Ltd of Australia. Presumably General Distributor’s direct owner is Progressive Enterprises Ltd, which was at the time of the transaction 57% owned by Foodland Associated, but is about to be subject to a full takeover. The price is $9,000,000 for the property on 1.9 hectares of land at Sissons Road, Main North Road, and Sawyers Arms Road. St Lukes buys Queensgate mall in Lower Hutt and secret property in Wellington St Lukes Group Ltd, 46.1% owned by Westfield Trust of Australia, and 26.19% owned by other Australian investors, has approval to acquire the Queensgate Shopping Mall, Lower Hutt, Wellington, for $135,000,000. The mall has frontages on Queens Drive, Waterloo Road, Bloomfield Terrace, Knights Road, Bunny, Margaret and High Streets. A number of details have, unusually, been suppressed from the "rationale" of this decision. The vendor is also suppressed, but the Press reports it as Retail Holdings Ltd. The purchase will be funded through bank debt, so not even new capital will come into the country as a result of the takeover (Press, 8/4/99, "St Lukes in $135m Lower Hutt deal", p.26). Also largely suppressed is another decision involving St Lukes in Wellington. Westfield, which is a major owner and manager of shopping malls, managed St Luke’s malls until December 1998, when it bought out Bankers Trust’s share. Westfield manages 79 malls in Australia, the U.S.A. and Aotearoa, plus 11 St Lukes ones (Press, 7/7/99, "St Lukes in $100m shop complex", p.27). It has been described as "a very, very aggressive and extremely demanding landlord. … difficult to deal with." (See our December 1998 commentary.) Chubb of the U.K. buys another security firm: Securitas Chubb New Zealand Ltd, owned by Williams Plc of the U.K., has approval to acquire "the business assets and undertakings" of Securitas Ltd of Australia. "The acquisition will provide [Chubb] with a manpower business by way of security guards and security patrolling to support development of its existing monitoring operations. It is claimed that extension of its business into static and mobile guarding services and cash security services will allow it to provide a one stop service throughout New Zealand…" Securitas was owned by Tempo Services Ltd, second in the Australian cleaning market behind the P&O subsidiary, Berkeley Challenge, and second in security behind Chubb, making it the largest Australian-owned company in both fields. It also provides courier and facilities management services, including catering, and has a Health Support Services division. John Schaeffer is its chairman and chief executive. He sold some of his 50% holding in the company in 1998, taking it down to about 42%. The company has been a major beneficiary of privatisation and contracting out in New South Wales, though this has not been a straight run: "In July 1994 the New South Wales Government privatised the Government Cleaning Service, responsible for cleaning government-owned sites. The service’s operations were broken up into five zones: Tempo won two tenders: Sydney Metropolitan North and Country North. By winning the tenders, Tempo took over the cleaning services for more than 1,100 government-owned sites, including primary and high schools, TAFE colleges, police stations, court houses, morgues and sport and recreational facilities. The contract was for three years with an option to extend for two, which the government took up. Although the contract has been a huge contributor to Tempo – it is the source of about a quarter of both revenue and profit – it has not been without problems. The cleaning workers’ union sued the NSW Government for redundancy pay and won, meaning Tempo could not cut staff as quickly through natural attrition as planned. Increased workers’ compensation claims and sick leave from the comparatively older workforce caused Tempo further problems; then, in September 1995 the government changed and the contract was renegotiated." (Shares magazine, Australia, September 1998, http://www.shares.aust.com/0998/shares08.htm.) Chubb is steadily expanding its operations in Aotearoa. In September 1998 we reported that Chubb had approval to acquire "part of the business assets and undertakings" of two local companies: Alarm Control (NZ) Ltd and Answer Services (NZ). In both cases, Chubb wished to acquire the client base of the company "in order to spread the fixed cost for its monitoring station and to give Chubb New Zealand Ltd and its subsidiaries an opportunity to provide other security and protective services to its client base." Daily Mail (Viscount Rothermere IV) buys XPO Group DMG Exhibition New Zealand Ltd, owned by Daily Mail and General Trust, which is 82.2% owned by Viscount Rothermere IV of the U.K. and the balance in U.K. public shareholding, has approval to acquire the XPO Group Ltd for $12,000,000. Daily Mail and General Trust "is seeking to expand its exhibition division to Australasia". UnitedNetworks (Utilicorp) buys office in Tauranga from Trustpower for $1 UnitedNetworks Ltd, formerly Power New Zealand Ltd, and 78.78% owned by Utilicorp United Inc. of the U.S.A., has approval to acquire an office at 120-122 Hamilton Street, Tauranga, Bay of Plenty for $1. The office, which includes 0.5666 hectares of land adjoining land used for recreational purposes, is being purchased from Trustpower Ltd, from which UnitedNetworks bought its electricity lines business in December 1998 (q.v.). The office is to be used to manage the lines business. The approval puts Trustpower ownership at 34% Infrastructure and Utilities NZ Ltd (Infratil NZ – see our commentary on the March 1999 decisions), 24.9% the Tauranga Electricity Consumer Trust, 8% the Tauranga District Council, 7.29% the Australian Gas Light Company, and 4.01% the Rotorua Energy Charitable Trust. However these are continually changing, with Infratil, jointly with Alliant of the U.S.A., vying against Australian Gas Light for control. Milburn, Allied Concrete reorganise ownership of Amberley mining operation Allied Milburn Ltd, 50% owned by Allied Concrete Ltd of Aotearoa, and 50% by Milburn New Zealand Ltd, has approval to acquire Amberley Sand (1996) Ltd for $155,823. Amberley Sand was previously 50% owned by Allied Milburn and 50% by Allied Concrete. This puts it directly into the ownership of the joint venture, increasing the ultimate ownership by Milburn from 25% to 50%. Amberley Sand owns 12 hectares of leasehold at Amberley Beach Road, Amberley, Canterbury. Milburn New Zealand Ltd is owned by Holderbank Financiere Glaris Ltd of Switzerland, which is 54.62% owned by the Schmidheiny family of Switzerland. In May 1996 we reported that Amberley Sand was leasing the land at Amberley for up to 15 years three months for mining sand, gravel, and shingle. It had been previously mined by the other 50% shareholder in Amberley Sand, Mr R. Harper of Aotearoa. Payment was "$1.00 per cubic metre of sand taken at the gate or 5% of the F.O.B. gate price whichever is the higher". Van Leer of the Netherlands buys Rexam’s packaging manufacturing operation Van Leer New Zealand Ltd, owned by the Van Leer Group Foundation of the Netherlands, has approval to acquire the assets of Rexam New Zealand Ltd’s flexible packaging division. Rexam New Zealand is owned by Rexam Plc of the U.K. The price has been suppressed. "Rexam New Zealand Ltd manufacturers and supplies flexible packaging material. The proposal is part of the continued geographical expansion of the Van Leer group of companies’ world wide expertise in the manufacture of flexible packaging fibre products." Carter Holt leases Marsden Point land from NZ Refining for wood veneer plant A rare "greenfield" manufacturing investment: Carter Holt Harvey Ltd, 51% owned by International Paper Company Ltd of the U.S.A., has approval to acquire a lease over nineteen hectares of land in Marsden Point Road, Marsden Point, Northland from the New Zealand Refining Company Ltd. The unused land, which is bare, will be used to build a plant to produce laminated wood veneer from Carter Holt’s forests in the region for export. Carter Holt is paying $93,937 annual rental for the first 21 years of the lease, with two lease renewals of 21 years each provided for in the contract. New Zealand Refining Company, the owner of the Marsden Point oil refinery, is owned
(The latter two presumably constitute Royal Dutch Shell’s ownership in the refinery.) More Northland land for NZ Plantation Forest Co of Japan for wood chips New Zealand Plantation Forest Company Ltd of Japan has two approvals to acquire more forestry rights near Kaikohe, Northland. In one decision, it has consent to acquire 37 hectares of forestry right in Jordan Road, near Kaikohe, from Dipetra Holdings Ltd of Aotearoa. In the other, it has consent to acquire 86 hectares of forestry right in Wharepanga Road, near Kaikohe, from Roger Frederick Poynter of Aotearoa. The price has been suppressed in both cases. New Zealand Plantation Forest Company is owned 30% each by Chuetsu Pulp and Paper Co. Ltd, Hokuetsu Paper Mills Ltd, and Marusumi Paper Co. Ltd, and 10% by Marubeni Corporation, all of Japan. The forestry rights are each for 15 years. The OIC says that in December 1997 the company "received consent to an investment programme to plant, maintain and cut up to 10,000 hectares of short rotation (whereby harvesting occurs every seven years rather than every 27 years as occurs in current radiata pine harvesting) pulpwood species such as acacia, in the Northland region and possibly other areas within the North Island." We have seen no such consent, although in December 1997 the company received approval to acquire a 22 year forestry cutting right over "approximately" 100 hectares of land in Tinopai, Northland in order to establish a commercial forestry operation on the property. In June 1998, it received approval to acquire a further 233 hectares of forestry cutting rights in Tinopai, Northland, and in July 1998, 15 year cutting rights over 23 hectares in Kaikanui Road, Opuawhanga and over 142 hectares at State Highway 12 and Jordan Road, near Kaikohe. In all cases the price was, and remains, suppressed. The company does "not intend to buy any of the land outright", using forestry rights instead. The logs "will either be exported whole, or will be sent to the Marusumi Whangarei Company Ltd plant to be chipped for export to Japan for use in manufacturing plants run by the company’s shareholders." Australian/Italian partnership adds Rugged Ridges Station to Otamatapaio Lempriere (New Zealand) Ltd, owned by Michael Raoul Lempriere and family of Australia, and Reda International S.A. owned by Luigi, Gergio and Roberto Botto Paola of Italy, each have approval to acquire 33% of Rugged Ridges Ltd for $332,177. The shares are being purchased from Pita Alexander and John Brandts-Giesen of Aotearoa, respectively. The other 34% is owned by John and Heather Perriam of Aotearoa. The company owns the 12,684 hectare Rugged Ridges Station at Kurow Road, Otamatata, Otago, which is pastoral lease. The same partnership also owns the 9,110 hectare Otamatapaio Station, which is made up of 1,193 hectares freehold and 7,917 hectares leasehold, at Omarama. The sale was approved by the OIC in September 1993 for $1,350,000. At that time, the Perriams, were "said to be amongst the leading fine merino producers in New Zealand". They proposed to develop the property into merino sheep operation. "The Commission is further advised that Reda SPA which is at the forefront of wool textile design and technology and Lempriere which is one of Australia’s leading wool exporters view the proposal as an opportunity to research, develop and establish a fine merino production base and source in New Zealand." In the present decisions, the OIC describes Lempriere group as "wool buyers and brokers in Australia and New Zealand with emphasis on fine wools. The New Zealand company is based in Christchurch and employs four full time equivalent staff." The Reda group "are involved in textile production from raw wool to finished product with particular emphasis on high quality fine wool cloth". The OIC states that it "is advised that substantial improvements have been made in the productivity of Otamatapaio Station since the parties’ acquisition". "It is intended that the Rugged Ridges and Otamatapaio properties will be farmed in conjunction with each other, enhancing efficiencies on both properties. The Rugged Ridges property will be developed for producing merino wool for the export market and for research into and development of ever increasing quality of fine wool in New Zealand." According to New Zealand Farmer ("Merinos and water bless Waitaki land", by Dianna Leslie, reproduced at http://www.maf.govt.nz/MAFnet/press/award98.htm, dated 9/11/98), Otamatapaio, in South Canterbury’s Upper Waitaki, rises from 335m to 1859m above sea level. Lakes Benmore and Aviemore bound and bisect the property. It and Rugged Ridges are managed by Ann Scanlan, and it carries 4,250 Merino ewes, 3,000 Merino wethers, 4,000 Merino hoggets, and also 210 Hereford cows. In its lower areas it has border-dyked irrigation, gravity-fed from the Ahuriri and Otamatapaio Rivers. Leslie says: "Last year Otamatapaio fleeces finished second in the South Island ewe competition and third in the wether section. In 1996 they were runner up in the Otago Clip of the Year. Early scepticism that Otamatapalo Station could not flourish under a woman’s management, with international co-owners, have died in the face of radical changes and success on the high country South Canterbury property. Much of the credit has been handed to the station’s manager, Ann Scanlan, who has been in the hot seat for four years. She is largely responsible for the property’s performance, which the partnership says has exceeded expectations." The article describes the Italian owners as from the Botto family, who run a leading vertical worsted woollen mill. The Perriams run the Bendigo Station. As we noted in 1993, again vertical integration is affecting our primary industry: overseas manufacturers and exporters who want to control their production from soil to sale. |
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