Chinese investment in Australian agribusiness had a breakout year in 2015, reaching A$375 million ($287 million; €252 million) after years of interest but little dealflow.
Three of a total 12 deals accounted for nearly half of Chinese investment in the sector last year – the Beingmate investment in Darnum/Fonterra, Tanma Bearing Group’s acquisition of and the Wollogorang and Wentworth stations and Dashang investment in Glenrock Station. These totalled A$170 million, according to a report by KPMG and the University of Sydney.
Chinese investment was geographically concentrated in the country’s south-east. Nearly half (49 percent) was directed towards New South Wales, and 34 percent was channelled into Victoria. Proportionally, Victoria attracted more money in agriculture, bringing in A$137 million, compared with A$75 million in New South Wales. The report predicts Chinese investment in Australia will increase by 10 percent in 2016 and remain strong for several years, with food and agriculture being a significant driver for growth.
Major deal-driven investment from Chinese companies into the sector, shows little signs of slowing, as a Chinese-led A$371 million acquisition of S Kidman property portfolio is expected to go through after an election this summer.
Australia has been the second most popular destination for Chinese direct investment over the past decade, receiving $78.7 billion; only the US received more direct investment. China’s total overseas direct investment into Australia was $11.1 billion in 2015.
Source: KPMG/University of Sydney.