August 2002 decisionsNoboa of Ecuador may take 30% of Turners and Growers – has 25.8% Young Nick’s Head Station sale approved to US buyer EDS buys back Telecom’s shareholding in EDS New Zealand St Lukes and Auckland One form joint venture for Broadway development Vladi, Thiel and Fellmann buy BNZ property in Wellington Kaneb of the U.S.A. buys Bulk Storage Terminals from Burns Philp Fletcher Residential buys land at Wattle Cove, Manukau, for subdivision Nikken Foods buys further land near Oamaru for its health science college Further land bought for Kinloch Golf Course, Rotorua
Summary statisticsFrom this month, the OIC is providing a statistical summary of its decisions for the current month and for the year to date.
All investments While the value of investment approved in the year to August 2002 is considerably higher than for the previous August year, the net value (i.e. disregarding sales from one overseas investor to another) is considerably lower. By far the greatest part of the value of the approvals is for sale from one overseas investor to another.
Investment involving land Sales of land approved by the OIC – both gross and net – have increased in area. Refusals (above) have risen in number, area and value, but are still a tiny proportion of the total.
One application refusedStephen Wilker Yochem of the U.S.A. has been refused approval to acquire 6.3 hectares at 34 Highway 6, Winton, Southland for $157,500 from AK Morton Family Trust of Aotearoa. The property was part of a larger block that was recently subdivided into lifestyle blocks by the vendor. It had previously been used for grazing but was not big enough to be an economic stand-alone farming unit. Yochem wanted to subdivide the land into three lifestyle properties for resale. The application was refused on the basis that it was not in the national interest. Noboa of Ecuador may take 30% of Turners and Growers – has 25.8%Bartel Holdings Limited, owned by the Alvaro Noboa family of Ecuador, has approval to acquire up to 30% of Turners and Growers Limited for $5,807,674. Turners and Growers owns 28 hectares in Auckland comprising 22 hectares at Harrisville Road and Geraghty Maber Road, Tuakau, and 5.8 hectares situated at Favona Road, Mangere. With the acquisition, the company becomes 46.9% beneficially overseas owned.
Noboa owns Bonita Bananas, which has an appalling record at home in Ecuador, as will be seen below. The significance of its Turners and Growers shareholding was intensified by the subsequent takeover by Turners and Growers of Enza, the privatised Apple and Pear Marketing Board. This creates one of the largest produce marketing businesses in Aotearoa. It will control a large proportion of domestic produce marketing, and be by far the largest pipfruit export marketer, with a substantial degree of control of that sector. It also produces fruit juices (part of its fruit juice operation was sold off in 1998, but continues to change ownership – see next item below).
The instigator of the takeover was the dominant shareholder in both companies, the Ron Brierley-controlled, U.K. based corporate raider, Guinness Peat Group (GPG). Its main interest is in capital gains, so it is likely that at some stage it will sell out to realise its gains. Noboa could well be a leading contender for control of the company, which has $430 million in assets and is expected to have annual revenues of between $1 billion and $1.2 billion after the takeover. GPG owned all of Enza, and 80% of Turners and Growers after the takeover, though this will be lowered to 50-60% after a planned capital raising in early 2003 (Press, “Turners wraps up Enza”, by Jillian Talbot, 7/12/02, p.C2; The Independent, “Shareholders tipped to be rewarded when Enza-Turners list”, by Jenni McManus, 11/12/02, p.3).
The present approval is in part retrospective. According to the OIC,
“Since the 1960’s, Turners and Growers Limited (T&G) has had a relationship with the Pacific Fruit Group which is owned by the Noboa family. The Pacific Fruit Group have been the principal grower supplier and the only supplier of bananas to T&G. Since the early 1990’s this relationship has been strengthened through the Pacific Fruit Group obtaining a shareholding in T&G.
In the early 1990’s T&G was receiving increasing requests from estates of deceased shareholders for those shareholders interests to be liquidated. The Applicant viewed that its proposed shareholding would provide T&G with capital to replace the liquidated deceased shareholders funds thus ensuring the continued viability of T&G’s business operations.
The Applicant’s shareholding exceeded 25% when it acquired additional shares through a dividend reinvestment scheme in April 2001 which has resulted in the Applicant holding approximately a 25.8% shareholding. Retrospective consent has been sought for the current level of shareholding.
In addition the applicant has sought approval to increase its shareholding to 30%. The additional percentage is to allow for the possibility of further small incremental increases as a result of the dividend reinvestment scheme.”
Alvaro Noboa is not just any Ecuadorian. According to the Wall Street Journal, he is “Ecuador’s wealthiest businessman”, having inherited his banana empire from his father, Luis. He was the second ranking candidate (with 17.4% of the vote) in the field of 11 in the first round of the October 2002 Presidential election, behind centre-left Lucio Gutierrez (20.3%), a dismissed army colonel who is an admirer of Fidel Castro and Venezuela’s President Hugo Chavez, with 19% of the vote (Wall Street Journal, “Two Candidates Vie for Lead In Ecuador Presidential Vote”, 21/10/02). Gutierrez beat Noboa in the deciding ballot on 24 November.
Alvaro Noboa’s Noboa Corporation (which owns Bonita bananas) has an appalling industrial relations record. The web sites of the anti-sweatshop Campaign for Labor Rights http://campaignforlaborrights.org and of US/LEAP (the U.S./Labor Education in the Americas Project) at http://www.usleap.org/Banana/Noboa/TwoAttackUpdate5-24-02.html document its history. US/LEAP summarise the position at time of writing as follows:
Striking banana workers in Ecuador ended their struggle at the Alamos plantations on November 28 and returned to work under terms of an agreement that won them health benefits and medical care for injuries resulting from attacks on May 16, 2002, but little else. Despite significant pressure on Alvaro Noboa, owner of the plantations, management refused to negotiate a collective bargaining agreement to improve wages and working conditions.
While the Alamos struggle has largely been unsuccessful in terms of the workers’ primary demands, it has been very successful in generating international attention on worker rights in the Ecuadorian banana industry and how Ecuador is leading a race to the bottom for banana workers throughout Latin America.
While Ecuador may have an advantage in banana production in terms of numbers, the working conditions, wages, benefits, and freedoms for the right to organize on Ecuadorian banana plantations are some of the worst in the region. Not surprisingly, unlike most of its competitors in the region, Ecuador’s banana industry is almost completely un-unionized.
In an earlier article in the Washington Post, (“Our Fruit, Their Labor and Global Reality”, 2/6/02, p.B05, Outlook Section, available at http://usleap.org/Banana/Noboa/WashingtonPostEcuadorEd6-2-02.html), Dana Frank, a professor of American studies at the University of California Santa Cruz, wrote:
Five companies, some with long-familiar names, dominate the Latin American banana industry. Noboa (whose bananas are labelled “Bonita” here in the United States) has become the world’s fourth-largest exporter, joining Del Monte, Dole, Chiquita and Fyffes (the European giant) as the kings of bananas. For years, the transnationals have competed intensely with each other for the U.S. and European markets.
Since 1998, a drop in demand has led to overproduction – and lower prices. Dole, Del Monte and Chiquita saw their stock prices fall, eliciting shareholder pressure to cut costs. As a result, banana production has become extremely mobile, as transnationals seek cheaper labour.
Abandoning their classic commitment to direct ownership of plantations, the corporations have turned more and more to contracting out production, especially in Ecuador. Increasingly, the exporters don’t own the land or the company on a given plantation, but tightly control the technology, production quotas and transportation – as well as the little label on the banana peel. Typically, the workers are hired by a subcontractor on an entirely temporary basis. Many workers, as a result, are never officially recorded as employees of a corporation – and thus are locked out of state-mandated health, pension and other benefits.
The subcontractors, meanwhile, absorb most of the risk – as well as the challenge of managing the workforce. The result is not unlike the subcontracting system in the garment industry, in which many transnationals famously evade responsibility for workplace conditions.
In sharp contrast to Latin American apparel workers, however, many banana workers have powerful unions representing them. I became involved in the world of banana exporting two years ago when activists with the U.S. Labor Education in the Americas Project (US/LEAP) asked me to help advise the Coalition of Latin American Banana Unions. I learned, to my surprise, that there are more than 40,000 unionized banana workers in the Latin American export sector, 18,000 in Colombia alone. With union contracts, banana workers have often been able to achieve an eight-hour workday, health and safety protections, adequate housing and a decent wage.
No wonder the big banana producers have been transferring production to Ecuador, which has been almost completely nonunion since the banana labour movement was largely crushed there in the 1970s. Dole now gets 31% of its bananas from Ecuador, Del Monte 13%, and Chiquita 7%, according to industry figures.
Bob Kistinger, president of Chiquita’s international division, complained in August 2000 that Ecuador’s rock-bottom wages were making it difficult for his company to compete elsewhere. Explaining the layoff of 650 workers in Honduras, Kistinger said in the Financial Times of London: “The costs in Ecuador are so much lower. There are no unions, no labour standards and pay is as low as two dollars a day.” According to a 2000 study by US/LEAP, a banana worker’s average monthly wage was US$500 in Panama, US$200 to US$300 in Colombia, US$150 to US$200 in Honduras – and US$56 in Ecuador.
The transnationals are quick to play this card in contract negotiations with the banana unions. Last October, when Del Monte threatened to leave Guatemala for cheaper climes, banana workers gave up 30% of their wages, 70% of their health benefits and two-thirds of the funds for their children’s school.
But that’s not the end of the story. On Feb. 25, 1,400 workers at seven Noboa plantations in Ecuador walked out, demanding decent wages, health care and legally mandated benefits. Quickly learning they needed legal recognition, they went back to work the next day. On May 6, with legal status established, 1,000 workers struck again, and they’re still out. Now, banana workers on other plantations (including one under contract to Dole) are talking strike.
Noboa’s response? At 2 a.m. on May 16, between 250 and 400 armed men descended on the striking plantations. Local police, U.S. and Danish trade union observers, the strikers and others gave the following account: The armed men, many wearing hoods, pulled workers out of their homes, beat them and shot several, one of whom lost his leg as a result.
All this took place against the backdrop of the Human Rights Watch report, released April 25 and entitled “Tainted Harvest: Child Labor and Obstacles to Organizing on Ecuador’s Banana Plantations.” The New York-based group found children as young as 10 or 11 often working 12-hour days and handling dangerous fungicides, while getting paid an average of US$3.50 a day.
The report also asserted that the industry was ignoring basic labour rights, the Ecuadorian Labour Code wasn’t being enforced and employers could easily fire workers for union activity. Most importantly, the system of temporary employment had allowed banana employers to evade paying millions in government-required benefits.
This is not simply Novoa closing his eyes to what his minions are doing. He is well aware of it and supports it. US/LEAP reports (http://usleap.org/Banana/Noboa/AttackNL802.html):
In a May 31, 2002 meeting with US/LEAP staff, two U.S. congressional aides, and a representative of the U.S. embassy, Mr. Noboa openly admitted that his company brought in the security guards, claiming that workers were damaging (or about to damage) his property. No evidence has been provided to substantiate this claim nor was it explained why the eviction, even if necessary, was carried out by private security guards in the dead of night rather than through the normal legal process.
Mr. Noboa’s advisors in the meeting also belittled the violence, saying it had “not been so much.” Mr. Noboa stated his explicit opposition to unions and said that if he was forced to have unions, Ecuador would end up like violent-torn Colombia, and essentially equated unions with guerrillas.
Yet on the other hand, Noboa tries to cultivate a liberal image. He divides much of his time between Ecuador and the U.S. According to the New York Times, “Mr Noboa remains a frequent visitor to New York, where, according to his spokesman, Pablo Martinez, he mingles with the Rockefellers and other luminaries. When his son was christened at St. Patrick’s Cathedral last year, an event shown on Ecuadorian television, Robert Kennedy Jr. served as the godfather.” He claims to be a personal friend of the Kennedy family.
He cultivated the same image during the hard-fought presidential election, though it was clear where his real politics lay. The need to renegotiate loans from the IMF, with expectations of demands for privatisation, cutbacks on government salaries and expenditure, and increases in utility prices were major issues in the election. The country defaulted on US$6.5 billion worth of debt in 1999 and dollarised its currency in 2000. Noboa said he would lower income taxes, replacing them with a value-added tax (like GST), would not accept a reduction in public servants’ wages, but have “zero fiscal deficits, undertaking a ‘re-engineering’ of the public sector to reduce costs”. Public services would be operated through private sector concessions – “not privatisation”. He would eliminate import tariffs on machines, apply a 5% tariff on primary resource imports and 20% on finished goods. Noboa, no relation of outgoing President Gustavo Noboa, is a former head of the country’s central bank’s board of directors (Dow Jones newswires, “Ecuador Businessmen Worried About Presidential Contenders”, 22/10/02; “Ecuador Govt Expenditures Hit 10.1% of GDP”, 23/10/02; “Ecuador Candidate Noboa Floats Voluntary Debt Overhaul”, by Mercedes Alvaro, 25/10/02; “Ecuador’s Alvaro Noboa Vows IMF Deal With No Tariff Hikes”, 15/11/02).
Meanwhile, as the above New York Times article reports, his billions depend partly on child labour:
“I love the workers at Los Alamos,” Mr. Noboa told local reporters in May, when he announced his candidacy. But in interviews, a dozen children and many adults spoke of child labourers at Los Alamos, among them a spindly-armed 10-year-old, Esteban Menendez. “I come here after school and I work here all day,” Esteban said. “I have to work to help my father, to help him make money.” …
… grim economic realities leave families more than ready to send their boys, and sometimes girls, out to work, even if it means pulling them out of school and placing them in fields or factories where they are exposed to hazardous conditions for little or no pay. For two years, Esteban and his family say, the boy has bounded up 15-foot banana plants, tying insecticide-laced cords between them to stabilize trunks that might otherwise collapse under the weight of the produce that is behind Mr. Noboa’s fortune of over US$1 billion. He works for nothing to help his father, who tends 98 acres, avoid having his pay docked. “That is the life of my sons, working in the bananas at such a young age,” said Esteban’s mother, Benita Menendez, 36, who has had three sons working at Mr. Noboa’s plantation, only one of them an adult. “I did not want them to work when they were little, but this is the reality.”
Ecuador’s problem is less severe than that of other countries in the region. Even so, the International Labor Organization estimated that 69,000 children ages 10 to 14, and an additional 325,000 young people ages 15 to 19, were working here in 1999. Only a significant increase in wages, at best a distant prospect in a country where the average worker earns US$5.74 a day, will keep families from sending their children out into the fields, labor advocates here and in the United States say.
(New York Times, “In Ecuador’s Banana Fields, Child Labor is Key to Profits”, by Juan Forero, 13/7/02, http://www.campaignforlaborrights.org/alerts/2002/updateonnoboabananacampaign.html)
Who gets the profits (apart from Noboa)? The New York Times again:
The existence of child labour on plantations is a product of simple arithmetic. Workers receive so little in part because the wholesalers and retailers abroad reap most of the profits, particularly with the recent consolidation of huge retail outlets like Wal-Mart, Costco and Carrefour.
Each 43-pound box of bananas purchased here by exporters for US$2 or US$3 goes for US$25 in the United States or Europe. The Ecuadorian grower makes 12 cents on the dollar, according to the National Association of Banana Growers. “These big chains say, ‘We will buy your bananas off the boat, but at our price,’” Mr. Seminario said. “So the exporter has learned that to sell to those chains he must sell at their price.”
There is an international trade union campaign in support of Noboa’s workers at his Alamos plantations. It involves
trade unions around the world who have been activated by the International Union of Foodworkers, European non-governmental organizations led by Banana Link and the European Banana Action Network (EUROBAN), and U.S. trade union, worker rights, trade, and religious organizations, including the Campaign for Labor Rights, Global Exchange, and the AFL-CIO. AFL-CIO President John Sweeney communicated his concerns to the president of Ecuador as well as to the U.S. government and the Noboa Corporation, while the Teamsters, the Communication Workers of America, and the International Longshoremen and Warehousemen’s Union have also lent their support. (US/LEAP Newsletter, “Ecuadorian Banana Workers Violently Attacked International Campaign Targets Bonita Bananas”, August 2002, http://usleap.org/Banana/Noboa/AttackNL802.html). Danone buys FrucorDanone Asia Pte Limited, owned by Danone of France, has approval to acquire Frucor Beverages Group Limited for $298,600,000. Frucor was previously owned by Critic Investments Ltd which was in turn owned 38.79% in Aotearoa, 31.2% by Bain Pacific Associates Limited of the U.S.A., and 30.01% in Australia, including 4% by Pacific Equity Partners. The sale includes 2.6 hectares at 22 Orb Avenue, Wiri, South Auckland.
Frucor began life as the highly successful juice operation of the Apple and Pear Marketing Board. While it retained some of the operation (see previous item) its first effort at privatisation of its members’ assets was to sell the Just Juice operation, which became Frucor. As we reported when the sale was approved by the OIC in May 1998,
Critic Investments Ltd, majority owned by Bain Capital of the U.S.A., has approval to acquire Frucor Beverages Ltd from the Apple and Pear Marketing Board (ENZA) for $65,000,000. In August 1997, the Board “made a decision to divest its interest in Frucor Beverages and appointed a Wellington investment bank to promote the sale nationally and internationally”. Some growers were not happy however, accusing the Board of “selling the orchardists’ family silver”. It was justified as not being a “core” business. The juice processing plants were being retained. The sale includes the kiwi icon of Fresh Up, plus Just Juice, McCoy, NZ Natural, Citrus Tree, and V brands.
Danone is a large French transnational – it claims to be, by volume, number one worldwide in fresh dairy products and in packaged water, and number two worldwide in cereal biscuits and snacks (see http://www.danonegroup.com/group/index_group.html). According to the OIC, it “has a presence in 120 countries with 170 production plants and employs 86,000 staff worldwide”. It is already present in Aotearoa through its market leading Griffins biscuit and snack food subsidiary.
It is part of an expansion in the Asia-Pacific region: according to the OIC,
Danone has a major presence in the Asia-Pacific region which it sees as one of the world’s fastest growing markets. Whilst Danone has a significant market share of the beverage segment in the Asia-Pacific region, its presence in the Australasian market is very limited. The proposed acquisition of Frucor would be a step in addressing this issue in this strategic market.
In 2001, an international consumer boycott of Danone was called for by ATTAC (an anti-globalist “international movement for democratic control of financial markets and their institutions” – see http://attac.org) in France, after Danone announced it would be sacking 1,780 workers and closing six of its 36 European biscuit factories despite also announcing record profits. The ATTAC group in the French National Assembly supported the boycott, as did a number of French cities, boycotting Danone products in school restaurants. Danone responded by taking journalist Olivier Malnuit, who had set up a “jeboycottedanone.com” web site, to court. Young Nick’s Head Station sale approved to US buyerFollowing a national controversy that was one of the most memorable features of the otherwise predictable July 2002 General Election, JA Griffin of the U.S.A. has approval to acquire 661 hectares at Nicks Head Station, Coop Road, SH2, Gisborne for $4,000,000 from SJ Gunn.
The station is of historical and cultural significance to both Pakeha and Maori. It was the point that Captain James Cook recorded as his ship’s first sighting of New Zealand in 1769. It is also the site of Te Kuri a Paoa, of spiritual significance to the Ngai Tamanuhiri iwi including the Rangihoua Pa with 15 archaeological sites, and the landing point of the canoe Horouta.
The Ministers who had final responsibility for giving approval for the purchase, Finance Ministers Michael Cullen and Paul Swain, tried to delay a final decision until after the election.
Ngai Tamanuhiri, led by former MP Tu Wylie, campaigned forcefully for agreement to the sale of a 200 hectare area of the headland to the iwi before the remaining purchase could go ahead. They had tried to purchase it but had been outbid by Griffin, a New York financier. Members of the iwi marched onto the land with banners and flags and occupied it, marched from Gisborne to Parliament and camped in its grounds in defiance of the Speaker, and finally attempted to lodge an application for an injunction against the sale of the land in the High Court. They gained widespread support from pakeha, politicians, Minister of Maori Affairs Parekura Horomia, and news media. They negotiated until the final hour with Griffin’s lawyers.
The government floated the idea of purchase of the headland by the Department of Conservation, but that was ruled out by Ngai Tamanuhiri. Cullen made it clear he would approve the sale subject to Griffin meeting concerns that the historically important parts of the land were protected. Wylie declared, “I just feel like we are being railroaded.”
The sale was finally approved by the ministers after Griffin promised to gift part of the headland to the nation – about 33 hectares of cliffs, the peak and a pa site. He also agreed to form a trust with local Maori to protect the property’s cultural and historical sites and not to develop it as a tourist resort or a golf course. He had previously offered to protect the farmland from further commercial development but not to gift part of it or “sell a third of it to people he had never met”. While Wylie saw the agreement as progress, he was still not happy. He saw the outcome as impractical, and was particularly concerned that none of the land ended up in the iwi’s ownership, and that access rights to fisheries and seafood gathering sites was not assured. He tried to apply for a High Court injunction to halt the sale, but it was too late and was refused by the Court.
Griffin has effectively bought the land as a huge lifestyle block. He told the New Zealand Herald that “he had fallen in love with New Zealand on a visit and wanted to buy some coastal land that America no longer had. ‘There just aren’t comparable spaces. We don’t have wide open coastal land.’ … Mr Griffin will build himself a new house and plans to make it his residence during the American winter.”
The seller, Susie Gunn, who has lived in Australia for 25 years, is a sister of neighbouring farmers. The farm has been run by a manager.
(Press, “Govt seeks delay of NZ landmark”, 28/6/02, p.A3; “Land sale delayed”, 29/6/02, p.A2; “Protection offered for headland”, 16/7/02, p.A7; New Zealand Herald, “Coastline moving”, by Geoff Cumming, 20/7/02, p.B6; Listener, “Land ahoy!”, by Bruce Ansley, 3/8/02, p.24; Press, “Land sale protest at Parliament”, 6/8/02, p.A5; “Protestors defy Speaker, make camp”, by Ruth Berry, 7/8/02, p.A9; “Go-ahead likely for sale of Nick’s Head”, by Ruth Berry, 9/8/02, p.A7; “Deal seals purchase of Nick’s Head”, by Ruth Berry, 10/8/02, p. A6; New Zealand Herald, “Owner aims to be friend”, by Audrey Young, 10/8/02; Press, “Nick’s Head issues unresolved – iwi”, by Ruth Berry, 12/8/02, p.A5; “Iwi in court action”, 14/8/02, p.A5; New Zealand Herald, “Young Nick court bid”, 24/8/02; Press, “Wyllie rejects sacking claim from iwi trust”, by Ruth Berry, 28/8/02, p.A6.)
The OIC’s decision reflects the vagueness of the outcome that worried Wyllie. At least though, it demonstrated that the government does have the power to do something – when public pressure is sufficient. The OIC states:
The Applicant proposes to acquire the subject property and implement both farm development and landscape development programmes. The Applicant proposes to preserve and improve the property’s unique landscape, ecological and historical values by erosion control, protection and regeneration of indigenous bush, and the protection and development of the Orongo Lagoon. A total of 51 hectares that is not currently used for farming is to be fenced off for conservation purposes. Farm productivity will be improved through increased carrying capacity and productivity.
The day to day management of the farm will remain in the hands of the existing farm manager and the proposed developments will be managed by a farm consultant and a landscape architect. Parts of the property are currently overgrazed, and this combined with a number of goats and possums on the property has lead to depletion of vegetative cover and hillside erosion. The Applicant’s proposed landscape development plan has addressed these issues and provides for fencing off erosion prone areas, weed and pest control, planting and regeneration of native bush and the protection of archaeological sites.
The Applicant is proposing to enhance the historical and cultural values of the property by: (a) protection of the headland/cliff face known as Young Nick’s Head by offering it as a gift to New Zealand, to be made an historic reserve; (b) incorporating in the abovenamed reserve two features that are adjacent to the cliffs, namely the Rangihoua Pa site and the area surrounding the summit of the headland, the mountain known as Te Kuri; (c) establishing a Queen Elizabeth II Trust open space covenant to protect the peninsula area of the property from the edge of the reserve in the north to the foot of the hill in the south, to ensure it is not developed otherwise for farming and that the historic sites and special interests of Ngai Tamanuhiri in the area are recognised. (d) Implementing a conservation plan; (e) Continuing the current access arrangements in place between members of the public and the current owner; and (f) Offering to enter into a trust in partnership with Ngai Tamanuhiri to maintain and enhance the Māori and conservation values of the cliff face area of the property. Coca Cola buys Rio BeveragesCoca-Cola Amatil (NZ) Limited, owned by Coca-Cola Amatil Limited of Australia, has approval to acquire Rio Beverages Limited for $40,375,000. The purchase includes 0.6 hectares of leasehold at Springs Road and Kerwyn Avenue, Manukau City, Auckland.
Rio Beverages was owned 50% by David Thexton of Aotearoa, 42% by Suntory Ltd, a Japanese public listed company, and 8% in Singapore. Its “main activities are the importation of raw materials and the manufacture of a range of fruit juices, fruit drinks, lifestyle beverages, energy drinks and bottled water”. EDS buys back Telecom’s shareholding in EDS New ZealandEDS World Corporation (Netherlands), owned by Electronic Data Systems Corporation, of the U.S.A., has approval to acquire 10% of EDS (New Zealand) Limited for $45,900,000 from Telecom Corporation of New Zealand Limited.
In July 1999 Telecom New Zealand Limited and EDS (New Zealand) Limited announced that they had entered into a strategic relationship. The relationship included a 10-year, $1.5 billion agreement for EDS to supply all of Telecom’s IS services, an equity position by Telecom in EDS (New Zealand), and an agreement to work together with Microsoft to develop and deliver online solutions to customers. Late in 2000, the terms of the equity stake to be taken by Telecom in EDS (New Zealand) was finalised. As a result of the ensuing Shareholders Agreement, Telecom IT Investments Limited acquired a 10% shareholding in EDS (New Zealand).
Telecom have since indicated they wish to divest its shareholding, and EDS (New Zealand) Limited’s parent corporation proposes to acquire these shares to bring EDS (New Zealand) Limited back to a 100% owned subsidiary as existed before the joint agreement.
For details of the original “strategic relationship”, and the 1999 approval for Telecom to acquire the EDS (New Zealand) shareholding see our commentary on the August and September 1999 OIC decisions respectively. Telecom had approval to acquire up to 49% of EDS New Zealand.
According to the OIC, Telecom is owned · 53.21% in the U.S.A., including 22.78% by Bell Atlantic Holdings Limited, 9.55% by Brandes Investment Partners, and 6.7% by Franklin Resources Inc. · 11.31% in the U.K. · 8.1% in Australia · 1.2% in Singapore · 4.74% by other “overseas persons” · 21.44% in Aotearoa. St Lukes and Auckland One form joint venture for Broadway developmentSt Lukes Group (No. 2) Limited, owned 94.1% in Australia, 0.4% elsewhere overseas and 5.5% in Aotearoa, has approval to acquire “an interest in”
· 3.9 hectares of freehold land at 277 Shopping Centre Broadway, 309-312 Broadway, 50 Gillies Avenue, 3 Mortimer Pass/365 Broadway, 11-13 Clovernook Road, Newmarket, Auckland; and · 0.3508 hectares of leasehold land at 6-14 Clovernook Road, access strip at end of Clovernook Road and 6 Mahuru Street, Newmarket, Auckland
for $96,500,000 from Auckland One Limited, which is owned by D and M Jen of Singapore.
Similarly, Auckland One Limited has approval to acquire
· 0.7343 hectares of freehold land at 73-75 Remuera Road, 10-14 Mahuru Street, 6 units at 27-65 Remuera Road, Newmarket, Auckland; and · 2.105 hectares of leasehold land at 2 Nuffield Street, 7-13 Mahuru Street, 23-35 Nuffield Street, 298-300 and 302 Broadway, Newmarket, Auckland
for $26,500,000 from St Lukes Group (No. 2) Limited.
According to the OIC, St Lukes (a subsidiary of the huge Westfield Trust of Australia) “owns commercial property on the east side of Broadway in Newmarket, Auckland on which it proposes to establish a retail shopping centre”. Auckland One Limited owns the 277 Shopping centre and peripheral land on the west side of Broadway “which it has intended to develop as a ‘supermall’”. The two companies “propose to enter into a transaction in which they will acquire 50% interest as tenant in common in each other’s property”.
The rationale for the proposed investment is to establish a joint venture development programme. Both parties have formed the view that by integrating their properties they can achieve a more efficient retail and mixed use development than would otherwise be the case if each undertook separate developments in Newmarket. Vladi, Thiel and Fellmann buy BNZ property in WellingtonWillis Developments Limited, owned by A Fellmann and G Thiel of Luxemburg, and F Vladi of Germany, has approval to acquire 0.3674 hectares of freehold and 0.1967 hectares of leasehold at BNZ Centre, 1 Willis Street, Wellington for $62,500,000 from BNZ Properties Limited, owned by National Australia Bank Limited of Australia. Vladi, Thiel and Fellmann
have made a strategic investment decision to acquire a portfolio of quality commercial investment properties in New Zealand. The proposed acquisition of the BNZ Centre represents the third acquisition by the Applicants having in October 2001 acquired two properties in Auckland neither of which required consent of the Commission.
The proposal is part of the Bank of New Zealand’s (the vendor) overall strategy of disposing of all of its interests in freehold property so as to release capital for investment in its core mainstream business activities.
In July 2002 the OIC approved Navire Holdings Limited, owned by Vladi, Thiel and Fellmann, acquiring the commercial property, “Mobil on the Park”, 157 Lambton Quay, Wellington for $74,250,000 from Midland Tower Company Limited. That month they also bought Pohuenui “Island” in the Marlborough Sounds. Collecting attractive islands is Vladi’s business and hobby. See our commentary on the July 2002 decisions for details of these purchases and their previous history in Aotearoa. Kaneb of the U.S.A. buys Bulk Storage Terminals from Burns PhilpKaneb Pipe Line Operating Partnership, LP of the U.S.A., has approval to acquire Bulk Storage Terminals Limited for a sum “to be advised” from Burns Philp and Company Limited of Australia. It includes 1.0 hectare at Gracefield Road, Seaview, Wellington.
The Applicant has entered into a competitive tender process to acquire all the shares in Bulk Storage Terminals Limited. The vendor is selling its storage and terminalling business in New Zealand and exiting this line of business to concentrate on other core strategic business lines.
The Applicant owns and operates a refined petroleum products pipeline business and a petroleum products and speciality liquids storage and terminalling business in the United States. It also has operations in the United Kingdom, Canada and the Caribbean. The proposed acquisition is interdependent on the acquisition of the vendor’s Australian storage and terminalling business. It will provide a means for the Applicant to expand its business into the South Pacific. The Applicant intends to maintain and grow the existing business of providing port-side bulk storage and teminalling services to the chemicals, plastics and industrial food ingredients industries. The business operates at Auckland, Mt Maunganui, New Plymouth and Wellington.
The Applicant has identified the potential to further develop the existing business operations through the installation of new product tanks and investigating the possibility of expanding to South Island ports.
Kaneb’s tender was successful: on 8/8/02, Burns Philp announced to the New Zealand Stock Exchange that it had
entered into an Agreement for the sale of the Terminals Division to subsidiaries of Kaneb Pipe Line Operating Partnership, LP for anticipated sale proceeds of approximately A$83 million ...
Terminals is the largest industry participant in both the Australian and New Zealand markets in terms of storage capacity and geographic diversity of operations. It operates in four of Australia’s seven major ports (Coode Island in Melbourne, Port Botany in Sydney, Geelong and Adelaide) as well as four of New Zealand’s six major ports (Auckland (in which BST has a 50% interest), Mt Maunganui, Wellington and New Plymouth). Fletcher Residential buys land at Wattle Cove, Manukau, for subdivisionFletcher Residential Limited, owned 57.7% in Aotearoa, 12.7% in Australia, 9.3% in the U.K., 8.7% in the U.S.A., 2.7% in Hong Kong, 0.6% in Japan, and 8.3% elsewhere, has approval to acquire 10 hectares at Wattle Farm Road and Blackwood Drive, Wattle Cove, Manukau City, Auckland for $16,526,375 from Kirkdale Investments Limited of Aotearoa.
Fletcher Residential “intends to acquire the subject properties to construct residential dwellings on the land. It is proposed to complete 79 residential lots at the Wattle Farm Road site and 90 residential lots at the Blackwood Drive site. The acquisition is viewed as an expansion of the residential building business of the Applicant in the Auckland region. The Applicant concentrates its business on residential housing development rather than residential land subdivision. The vendor is completing the necessary infrastructure for the subdivisions.” Nikken Foods buys further land near Oamaru for its health science collegeNikken Foods Co Ltd, owned by 74% by Hirotomo Ochi of Japan and 26% by other shareholders in Japan, has approval to acquire 21 hectares at 579 Fortification Road, Kakanui, Oamaru, Otago for $371,250 from Tien Ng of Aotearoa.
The Applicant was founded in 1964 and has subsequently become a pioneer in the development, manufacture and marketing of natural food flavourings. The Applicant’s aim is to supply food products that are beneficial to health and it manufactures more than 1,000 natural flavourings. Within the Applicant’s group structure there is a high importance on research and development including the Institute for the Control of Ageing, the Research Institute for Future in Foods and the Health and Fitness Institute.
The Applicant’s chairman has discovered North Otago the perfect setting for the international expansion of the research and development programme. In 2000, the Applicant acquired a 29.5328 hectare property near Oamaru known as Teschemakers to establish an international college for post-graduate international and New Zealand students of health science. The Applicant has also obtained consent to acquire adjoining farm land for the purposes of progressing its work in sustainable organic and healthy farming (13.2876 hectares and 21.7405 hectares). The Applicant is also undertaking developments on the farm as part of the college, utilising the crop, stock, dairy and vegetables to establish an organic farm network.
This purchase is the first acquisition in a land purchasing programme. The Applicant proposes to acquire approximately 250 hectares in the North Otago region, within a 5 kilometre radius of the Teschemakers college. It is proposed that the land to be acquired will be utilised for experimental/research purposes, as buffer land and for commercial production. The Applicant envisages that the international college will encourage and promote post-graduate study, research and development in the area of organics and healthy-living. This will provide demand for workable tracts of land with boundaries free of contamination from insecticides, herbicides and genetically engineered plants and crops.
The Applicant has advised that reconstruction of the Teschemakers College is underway with a view to opening for courses in late 2003. The subject property is likely to be used for experimental/research purposes once the college opens. In the interim the land will continue to be used for market gardening.
See our commentary on the June 2002 decisions for Nikken’s last purchases. Further land bought for Kinloch Golf Course, RotoruaKinloch Golf Resort Limited, owned 37.5% by Jean-Paul Pavlovic of Switzerland, has approval to acquire · 31 hectares at Kinloch Road, Kinloch, Taupo, King Country for $2,250,000 from Kinloch Golf Course Limited of Aotearoa; and · 41 hectares in the same location for $1,968,750 from Kinloch Park Limited of Aotearoa.
Kinloch Golf Resort Limited
“was granted consent to acquire 255.07 hectares adjoining the subject property on 24 March 2000 to develop an international golf course with associated facilities and up to 80 residential lots. This transaction was settled in June 2001, and since to date the Applicant has obtained resource consent for the development of this property and is undertaking the planning and design process of the development.
The Applicant now proposes to acquire the subject property together with an adjacent property which comprise a public golf course, a green belt area and an open space area. The Applicant’s golf course designers, Jack Nicklaus Design have advised that it is essential that the green belt/open space remain and not be intensively developed, to ensure the on-going success and viability of the Applicant’s overall development comprising the 18-hole international golf course, 204 residential sites, and an accommodation lodge with up to 50 rooms to cater for high-end tourism. It is expected that the golf course development/lodge will be completed for opening during the first quarter of 2004 with the residential development commencing in 2003 over a 5 year period. The vendor was not prepared to sell the green belt area without also selling their public golf course. The Applicant will maintain the golf course as a public golf course.
In reference to the March 2000 acquisition we reported that
Jean-Paul Pavlovic of Switzerland has approval to acquire 255 hectares of land at Garden Heights, at the corner of Kinloch and Whangamata Roads, Taupo, King Country for $2,953,124 from Kinloch Heights Ltd. He had lent “substantial capital” to Mr S. Okakura of Japan who had intended developing a larger property of which this was a part into a tourist resort and leisure complex. However Okakura got into financial difficulties and the property was sold in a mortgagee sale. Pavlovic is buying this land “as the basis of his application for permanent residency in New Zealand”. He intends to develop a commercial forestry operation on approximately half the land and develop an international golf course, lodge “catering to the top end of the market”, and 80 house sites on the remaining land.
It appears that Pavlovic’s permanent residency didn’t eventuate. See our commentary for that month for earlier history of the land involved. Land for forestry· The Salt and Light Family Trust of Taiwan, has approval to acquire 19.6 hectares at State Highway 22, Te Akau Road near Ngaruawahia, Waikato for $113,405 from New Zealand Forestry Group Limited, owned 76% by Wesley Garratt of Aotearoa and 24% by J Hong of Taiwan. The Applicant is a member of the Brooklands Forest Group, which “has entered into an arrangement with New Zealand Forestry Group, to develop approximately 1,200 hectares of land at Ngaruawahia”. The sale is like many in this and other regions organised by New Zealand Forestry Group, the last such sales being in July 2002, also in Ngaruawahia, with investors in the Brooklands Forest Group. The investors provide the money, while New Zealand Forestry Group manages the development of the forestry operation. · 535078 Ontario Limited, owned by William Roth of Canada, has approval to acquire 204 hectares at Pack Spur Road, Matakona, Castlepoint, Wairarapa for $371,250 from EH and PA Gard of Aotearoa. Roth “has existing forestry investments in New Zealand in the Wairarapa region. The subject property currently has approximately 164 hectares planted in pinus radiata with an age varying between 7-20 years which are likely to be millable at the same time as the trees in the Applicant’s existing forestry investments. Once the forest is harvested the Applicant intends to replant the property. A majority of the existing trees are in need of pruning which the Applicant will undertake. The land currently not planted in forestry will be rollercrushed and planted in pinus radiata.” In May 2001, William Roth had an application to acquire land in Wairarapa refused by the OIC. A forestry consultant’s report found that it was not economically viable for further forestry development, and the OIC considered the acquisition not in the national interest. See our commentary on that decision for other land holdings by Roth. Land for wine· Montana Wines Limited, owned by Allied Domecq PLC of the U.K., has approval to acquire 17 hectares at Riverpoint Road, Gisborne for $765,000 from Matawhero Wines Limited of Aotearoa. “The Applicant has identified the acquisition of further vineyards or land for development for the growing of grapes as a way of being able to compete more effectively in the national and international wine markets. The subject property adjoins an existing vineyard owned by the Applicant… The subject property is an established vineyard that is surplus to the vendor’s requirements.” · Lion Nathan Limited, owned 46.13% by Kirin Brewery Company Limited of Japan, 27.77% in Australia, 18.63% in Aotearoa, 6.47% in the U.S.A., and 1% elsewhere, has approval to acquire 59 hectares at Rapaura Road, Wrekin Road, Stump Creek Land, Hawkesbury Road, Old Renwick Road and St Leonards Road, all Blenheim, Marlborough for $12,937,500 from Ngai Tahu Vineyards Limited of Aotearoa. Lion Nathan “proposes to acquire six vineyard blocks located in Marlborough. The proposal will allow the Applicant to establish a greater presence in the wine market and extend its current business to include a wine division. The Applicant will utilise its industry, marketing and investment expertise to further develop the wine division of its business through its wholly owned subsidiary, New Zealand Wines and Spirits. The Applicant proposes to introduce more intensive viticulturist methods to increase productivity from the vineyards.” · Ballochdale Estate Limited, owned 33.33% in the U.K., 50% by Garry Patrick Fyans Neill of Aotearoa, and 16.67% by Janice Anne Reid of Aotearoa, has approval to acquire 36 hectares at Ballochdale, Awatere Valley, Marlborough for $2,000,000 from Neill. Neill, “who has farmed the subject property as part of a larger farming property” wants to get into viticulture. “In order to source the capital required for the project it is proposed that a limited liability company be formed to establish and operate the vineyard. The Applicant is in effect a joint venture with the New Zealand vendor providing the land, dam and water pipe-line for the development and the United Kingdom investors the capital for the vineyard project. The subject property has 31 plantable hectares of which approximately two thirds will be planted in Pinot Noir with the remainder planted in Sauvignon Blanc.” · Andrus Family Trust NZ Holdings Limited, owned 55% by Andrus Family LLC, 15% by R Gary Andrus Revocable Trust, 15% by Andrus Family Children’s Trust, and 15% by Christine Lorraine Metz Andrus, all of the U.S.A., has approval to acquire 8.4 hectares at 246 Felton Road, Bannockburn, Central Otago for $843,750 from 246 Felton Road Limited of Aotearoa. “The Applicant who is an experienced viticulturist/winemaker proposes to acquire the subject property which is currently utilised as a fruit orchard predominantly planted in nectarines. In recent years the Bannockburn area has been extensively planted in vineyards and wine from this area is highly acclaimed. The Applicant proposes to establish a vineyard in Pinot Noir. The Applicant intends to monitor the vineyard operations and apply his extensive expertise from his United States operations to improve the match of soils, climates and weather with the clones best suited for this region. This proposed acquisition is part of the Applicant’s business plan to acquire existing vineyards and bare land suitable for Pinot Noir production in Central Otago. In this regard Mr Andrus has obtained consent to acquire a 5.215 hectare property at Gibbston Valley. The Applicant proposes to establish a winery to process grapes from his properties and will use his established sales networks in the United States to export up to 8,000 cases of wine annually.” The Gibbston Valley purchase was approved in May 2002 (see our commentary for that month for details), and was for RG Andrus rather than the present maze of trusts. Other rural land sales· Jeong Han Lim and Keum Soon You of Korea have approval to acquire 63 hectares of freehold and 2.3 hectares of leasehold at 198 J V Grant Road, Wellsford, Northland for $600,000 from TJ and SA Beuker of Aotearoa. “The Applicants, who have had experience managing a deer farm in Korea, propose to acquire the subject property as a deer farm and as a permanent residence. The Applicants are currently residing in New Zealand under the Long-Term Business Visa scheme. The farm will focus on producing velvet in particular for export to Asia. The vendors presently produce velvet. The Applicants will diversify production to velvet and venison. As a longer term plan a homestay operation targeting the Korean tourist market may be incorporated into the farm. The Applicants are demonstrating their commitment to New Zealand by applying for New Zealand residency and residing on the property”. · Adrianus and Ivonne Josephine Marie Van Kersen of the Netherlands have approval to acquire 14.8 hectares at Fergus Road, Waihi Beach, Coromandel for $315,000 from PD and AM Buckthought of Aotearoa. The land “is part of a subdivision of a larger block of land recently subdivided by the vendors. The vendors previously utilised the property as a dairy farm and have recently subdivided their property into four lots and marketed them as lifestyle blocks … Mr van Kersen (Work visa) and Mrs van Kersen (Visitors visa) and their children have lived in New Zealand since 2000 (Mr van Kersen is the Operations Manager at the Waihi gold mine) but have yet to apply for permanent residency due to work commitments. The Applicants intend to construct a dwelling on the subject property and reside there permanently. They also intend to establish an olive grove to produce table olives, initially on one hectare with plans to expand this area to five hectares once it is established which olive varieties are best for the subject property.” · Derek Gordon Elwell and Sally Ann Elwell of the U.K. have approval to acquire 7.4 hectares at 97 Poplar Lane, Edgecumbe, Bay of Plenty, for $343,125 from NJ and LJ Merry of Aotearoa. “Sally Elwell is a dressage expert and is currently in New Zealand on a long-term business visa. Ms Elwell intends to apply for New Zealand permanent residency and reside permanently in New Zealand once she has fulfilled the requirements of the business visa. The acquisition of the property will provide base for her dressage business which has progressively been established over the past four years. Derek Elwell, Sally’s father, is currently realising his United Kingdom assets with the intention to settle in New Zealand and will fund the proposed purchase and development. The business operation proposed includes a dressage training school, specialising in preparing riders and horses for dressage either for recreational purposes or competition.” · Radiata Bay Partnership, owned by S R Braswell (23%), G W Milner (18%), M E Ralston (18%), all of the U.S.A., 35% by “overseas persons” of unknown origins, and 6% by Roger Dickie of Aotearoa (who is also the contact for the transactions), has approval to acquire · 233 hectares at Tangoio, approximately 20 km north of the Port of Napier, Hawkes Bay for $5,238,094 from Radiata Bay Ltd, owned 50% each by S R Braswell and E D Braswell, both of the U.S.A.; and · the adjoining 311 hectares at Tangoio Settlement Road, Tangoio, Napier, Hawkes Bay for $1,771,875 from T P Mahony of Aotearoa. “It is proposed that a diverse species forest consisting of radiata pine, douglas fir and redwood will be established on approximately 400 hectares. A lifestyle subdivision comprising up to 30 house lots is to be developed over an area totalling approximately 30 hectares. The remaining area of approximately 118 hectares comprises unplantable land and land that will continue to be farmed pending long-term development plans of a tourist lodge.” · Karl Joachim and Adele Christine Kohle of Germany have approval to acquire 18.4 hectares at Loburn Terrace Road, Loburn, Rangiora, Canterbury for $137,812 from Okuku Farm Limited of Aotearoa. The Kohles “are currently residing in New Zealand under the Long-Term Business Visa scheme. They operate a restaurant business in Rangiora and propose to acquire the subject property for use as a permanent residence and to undertake a small organic farming operation to complement their restaurant. The Applicants intend to apply for and reside in New Zealand permanently.”
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