New Hope Group (New Hope), China’s largest privately owned agribusiness, has announced plans to invest up to A$1 billion in Australian agriculture by 2020.
Nick Dowling, CEO of New Hope’s Australian operations, announced the company’s investment plans during an interview with the ABC, Australia’s national broadcaster. Speaking on behalf of Group Chairman Liu Yonghao, Dowling says New Hope is looking for further investments in Australian premium food operations, from lamb to aquaculture.
‘We invest into businesses, we don't acquire businesses,’ says Dowling. ‘We look to work with great partners that have great businesses where we can bring our resources and market access to give life to opportunities that business wouldn't otherwise have. It's all about giving oxygen for those businesses to grow.’
New Hope’s recent announcement builds on its existing diverse investments in Australia, which include a controlling stake (finalised in 2013) of Kilcoy Pastoral Company (KPC), a Queensland-based beef processor and exporter.
Dean Goode, CEO of KPC, told the ABC that New Hope’s investment resulted in 130 new jobs, enabled the company to replace older assets and helped pave the way for future growth.
‘For the local community it’s been huge, and as the investment comes together we’ll see more jobs created,’ he says. ‘The New Hope name has enabled us to gain access not just in China but globally to financiers, business partners or future customers or suppliers.’
Following its investment in KPC, in 2014 New Hope entered into an agreement with ASX-listed Freedom Foods Group and its majority shareholder, Perich Group, to set up large-scale intensive dairy farms in southeast Australia.
In 2015, New Hope Real Estate made its first investment in Australia. Together with local partner VIMG, it is developing ‘The Landmark’, a residential tower in North Sydney.
In 2016, the group opened a local headquarters in Sydney and acquired Australian NaturalCare, a vitamin and supplements company.
Founded in China in 1982, New Hope Group has more than 600 subsidiaries in 30 countries, nearly 70,000 employees and annual revenue of approximately ¥80 billion. Its businesses encompass feed production, agriculture technology, food processing, channel construction, facility building and financial services.
Tony Eyres, Senior Investment Specialist, Agribusiness and Food at Austrade, says New Hope’s long-term projects help contribute to a steady rise in China’s foreign direct investment (FDI) into Australia.
‘China is Australia’s top two-way trade partner and our largest agricultural export market, but China does not make the top three list of sources of FDI into Australia,’ he says. ‘This shows there is room for FDI from China to grow. The majority of inward FDI stock continues to come from traditional sources such as the US, UK and Japan, with China growing rapidly from a low base.’