Purchase could be win-win for consumers and exporters: experts
A number of Chinese companies are looking to buy a parcel of Australian land that encompasses a number of cattle ranches, according to reports from several media outlets. Experts say such a purchase would be a win-win deal for both sides, given China's vast market for agricultural products and Australia's abundant agricultural resources.
As many as seven Chinese firms are linked to a bid for a 100,000-square-kilometer piece of land in the Australian outback that is home to nearly 200,000 cattle and several hectares of cattle ranches, including the world's largest such ranch, Anna Creek. The parcel's holder, S. Kidman & Co, offered its holdings for sale in April, news portal thepaper.cn reported Monday.
Chinese firms believed to be involved in the bid include Guangzhou-based Donlinks Grain and Oil Co, Shanghai Pengxin, two other private companies and a consortium of three firms led by Shanghai CRED, according to the thepaper.cn report.
A representative for Donlinks gave confirmation to the Global Times Monday that the company is partnering with British Virgin Islands-registered Genius Link Capital to bid for the property, citing a statement to the Shenzhen Stock Exchange.
The statement, which was released on September 30, said that Donlinks will hold a 51 percent stake in S. Kidman if its bid is successful.
Shanghai Penxin and Shanghai CRED could not be reached for comment as of press time.
Experts believe that Chinese consumers will benefit if a Chinese company wins the bid.
Ma Wenfeng, an analyst with the Beijing Orient Agribusiness Consultant Co, said that operation of the ranch by Chinese firms would help bring more agricultural products like beef to the enormous Chinese market, helping consumers.
The enormous tract of land could also serve not only as a cattle ranch but as a base through which Chinese companies might be able to import other Australian agricultural products to China, Ma told the Global Times Monday.
He said such an arrangement will provide Chinese consumers with more options at the supermarket.
Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Science, believes the benefits go both ways.
"This is not only good for Chinese consumers, it is in the interest of Australians as well," Li told the Global Times Monday, noting that Australia would gain benefits from access to the vast Chinese market through such deals.
Li said China is a major importer of Australian goods, and a potential deal would further expand the trade relationship between the two countries. He stated that he believes it is "reasonable" for a Chinese company to win the bid.
Bidding results could be announced as early as next month, the Australian Broadcasting Corporation (ABC) reported on Friday, citing a statement from S. Kidman managing director Greg Campbell.
Campbell said that a shortlist of bidders making final offers will be completed on October 27, while short-listed bids will be considered and a preferred bidder identified at a board meeting scheduled for November 2.
S. Kidman is also working on securing a range of statutory government approvals, as "a change in control of a company owning a pastoral lease requires government approvals, even though the lease itself isn't actually being sold [and] it's remaining under the holding of S. Kidman and Co," Campbell told the ABC. He added that foreign investment approvals are also required for off-shore groups to purchase S. Kidman shares.
Australia's Department of Defense said that any buyers could be subject to a security assessment in addition to standard government approval procedures because some of S. Kidman's properties are in close proximity to the top-secret Woomera Test Range, the Australian Financial Review (AFR) reported on October 1.
The AFR also reported that the existence of Pine Gap, a Northern Territory satellite tracking station jointly operated by the U.S. and Australia, could complicate the sales process for foreign bidders, even though the site is hundreds of kilometers away from any S. Kidman property.
