Statement from May Wang

Statement from May Wang
9 April 2010

There have been many requests from the media for interviews with me. Unfortunately I am still travelling in Asia and a face-to-face interview is impossible.

However, I do intend to make myself available for some interviews upon my return in about two weeks time.

In the meantime, to correct some of the media coverage about myself that I believe has been false, I want to state some of the basic facts about myself, my business history in New Zealand and the UBNZ/Natural Dairy project.

I am a New Zealander. I am a citizen of this country and I live here. I want this project to succeed for the good of the country that is now my home. I was born in China. With three elder brothers, I was the only girl of the family. My parents died quite young after experiencing a hard time in the Cultural Revolution. I have always had to rely on myself and I believe in working hard.

The reason we are raising capital for the venture in Hong Kong is that we know that market and it is much larger than New Zealand’s market. This means we can raise, if necessary, up to $1.5 billion for the acquisition of dairy farms in this country.

$1.5 billion can only add value to the New Zealand economy and it mean New Zealand farmers can get a fair market value for their farms to reduce financial pressures on them.

There have been repeated comments from some sectors that foreign ownership of some New Zealand dairy farms would mean a loss of benefits to the country. This fear is misplaced.

Our investment will deliver huge long-term benefits to the New Zealand economy. As Federated Farmers president Don Nicolson rightly said, “The land could not be taken away” and that “the person who owns the land, works the land, abides by New Zealand laws, pays taxes in New Zealand, employs New Zealand people … that’s surely a good thing”. I totally agree with him on this.

Fonterra has invested heavily in dairy farming in China, shipping thousands of cows there to do so. Why should a Hong Kong listed public company not have the same opportunity to invest in a New Zealand dairy business?

We are committed to a long-term plan. We do not intend investing the entire $1.5 billion in the dairy industry immediately. Subject to OIO approvals we will, over an extended period, acquire the farms and plant we need.

We have begun with the application to purchase an initial holding that comprises the 29 “Crafar farms”.

Our plan is to run a fully vertically integrated dairy company. By that I mean, we own the land, cows, factories and packaging. We already have distribution channels in 24 major Chinese cities.

Vertical integration means the product we sell in Asia is made 100% by us. Currently New Zealand makes very small quantities of long life milk and infant formula (most of which is made overseas, some using Fonterra milk powder).

A New Zealand company that does not simply export milk powder but adds value and turns it to an export of a finished product (such as infant formula or UHT milk) will benefit the country greatly, make good profits, provide more employment and pay higher taxes to the government.

The shortage in supply of a safe and good quality milk products in China is the main focus of the current capital markets. It is proving to be one of the best investments for overseas investors.

Some interest groups have raised questions about Natural Dairy’s experience in the dairy industry. Our expertise lies in packaging and distribution in China. However, we are using a lot of New Zealand consultants and employees who are experienced in the dairy industry. The farms we purchase will be run by New Zealanders who are experienced farm managers.

Some media have asked about the various company structures involved in this project. The answer is relatively simple.

UBNZ Assets Holdings Ltd is the New Zealand company that is acquiring the farms. The Hong Kong listed Natural Dairy owns 20% of UBNZ. It will buy the remaining 80% of the shares of UBNZ after the approval of OIO. as the project proceeds. UBNZ has two other New Zealand directors and more will be added. When Natural Dairy takes over the entire company, it is planned that these New Zealand directors will stay with the company or go onto Natural Dairy’s board.

Much has been written about my previous business history in New Zealand. Much of that has been wrong or misrepresented.

My Dynasty Group of companies collapsed owning shortfalls to about seven banks and finance companies. These shortfalls relate to property projects that I and my then business partner, south Auckland businessman Rob Reece, had undertaken. I understand Rob Reece was also involved in the so-called “Lion Man saga” – I was not.

The short story is that Rob Reece offered to put funding or equity from his Legacy Group company into the Dynasty Group. That promise never eventuated, the credit crunch came, the property market collapsed, Rob Reece resigned as a director of all the companies and then declared himself bankrupt.

I was therefore left with all the issues that I am now doing my best to resolve. I am actively working on a proposal to creditors to repay them.

It has been reported I am facing charges brought by the Companies Office in relation to the Dynasty Group. I am confident that these difficulties will soon be resolved but I can say little more at this stage for legal reasons.

In relation to this issue, I can say reports that I “fled” to China on a one-way ticket when liquidators became involved in the Dynasty Group in 10th October 2008 are wrong. I bought a one-way ticket because I had already held a return ticket from Shanghai to Auckland at that time. I returned to New Zealand twice during that period and I reside here still.

The reason I have been backwards and forwards between New Zealand and China is that I have been putting together the Natural Dairy project.

We have sufficient capital to complete the purchase of the remaining Crafar farms and, if we gain OIO approval for that, we will continue capital raising in Asia to fund more acquisitions.

Even if we invest the entire $1.5 billion proposed in the New Zealand dairy industry this will involve just a small percentage of the estimated $67 billion worth of dairy farms in the country. Also, we are focused on UHT milk and added value “infant Formula milk powder”. We won’t be a competitor to Fonterra either.

I believe in this project, I believe it is good for farmers, good for the local dairy industry, and good for the country’s economy.

I do not believe my previous business difficulties should be used against a project that will only bring benefits to this country. I would like to say that even if I have failed with my previous business, why couldn’t I be successful in business again?

May Wang
Director
UBNZ Assets Holdings Ltd

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