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Chinese company buys stake in New Zealand apple exporter

China Resources Ng Fung has also developed an agent and distribution business for imported foods in China, and will work with New Zealand company Scales to improve its position as an exporter tin the country.

State owned enterprise China Resources Ng Fung has bought a 15.38 percent share of New Zealand apple exporter Scales Corp for nearly NZ$56 million ($38.13 million; €33.75 million) from New Zealand private equity firm Direct Capital Investments, according to an announcement issued on the New Zealand Exchange (NZX).

“Scales welcomes China Resources as a significant minority shareholder, and as a party who can provide support to Scales in its ongoing initiatives in China,” reads the announcement.

The acquisition was made through the sale of 21.5 million shares. Direct Capital owned 84 per cent of Scales shares through its Direct Capital Fund IV in 2014, suggesting the fund is still the majority shareholder in the business. Direct Capital was not immediately available for comment.

China Resources Ng Fung’s main businesses include rice, fruits and vegetables, meat, frozen foods, import foods, and modern agriculture industry. It has also developed an agent and distribution business for imported foods in China, according to the company website.

Annual fresh fruit exports hit a record NZ$2 billion last year, with China becoming an increasingly important export market. The highest value exports in May 2015 were kiwis and apples, which made up NZ$280 million and NZ$157 million respectively of the month’s NZ$445 million total, according to Statistics NZ. That was despite a 4.8 percent drop between 2012 and 2014 in the overall area planted with apples.

About one quarter of fruit exports last June went to the EU, with Japan taking 14 percent and China 13 percent. China’s fresh fruit imports rose by 22.8 percent between 2015 and 2015, according to China Customs.

Direct Capital has raised more than NZ$800 million since it was established in 1994. Their latest fund, Direct Capital IV held a final close in 2009 on NZ$325 million, according to their website. Scales listed in 2014.