Overseas investment decision for case 200610076 - Cedenco Foods

To acquire:

1. an interest in land which, either alone or together with any associated land, exceeds 0.4 hectares and adjoins land over 0.4 hectares that includes a historic place, historic area, wahi tapu, or wahi tapu area that is registered or for which there is an application or proposal for registration under the Historic Places Act 1993; and
2. an interest in land which, either alone or together with any associated land, exceeds 0.4 hectares and adjoins land that is listed, or in a class listed, as a reserve, a public park, or other sensitive area by the regulator under section 37.

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Cedenco Foods (Cedenco) proposes to acquire the business and assets of Circle Pacific Limited (Circle Pacific). As part of the transaction Circle Pacific will procure that the landlord (a company associated with Circle Pacific) will grant a new lease to Cedenco. Under the lease, Cedenco will have an option to purchase the land at market value at any time prior to 12 months before the expiry of the initial three year term of the lease. Each lease will also grant Cedenco a right of first refusal to purchase the land if the landlord wishes to sell it, for so long as Cedenco is a tenant.

Cedenco's major business activities are processing vegetables and fruits into powders, aseptic pastes and purees, block frozen purees, UHT purees and free flow frozen products in New Zealand. Cedenco sells products to mainly multinational companies who use Cedenco products in their own products. Following Cedenco's 2005 acquisition of Sunrise Coast New Zealand Limited, Cedenco is now also a packer, trader and marketer of fresh and processed fruit and vegetables, and produces some packaged food products for retail markets.

Circle Pacific is an integrated producer, packer, exporter and supplier of high quality fresh and processed fruit and vegetables from New Zealand. Circle Pacific is also a co-packer of processed fruit and vegetables on behalf of other marketers. The acquisition by Cedenco will provide a production base in a new geographical region and enable it to process a range of fruit and vegetables not currently processed by Cedenco.

The proposal is likely to result in the following benefits:

1. the creation of new job opportunities in New Zealand;
2. increased export receipts;
3. increased efficiencies and productivity; and
4. the introduction into New Zealand of development capital.