Blue Sky Meats strengthens Chinese ties after exporter pays premium for 11% of company
By Suze Metherell
April 7 (BusinessDesk) – Blue Sky Meats has strengthened ties with China, its largest market by volume and value, after
two Auckland-based businessmen paid a premium for 11 percent of the unprofitable meat processor.
Cook Huang and Qiang Zheng acquired the Blue Sky holding from Danish casings company DAT-Schaub Group for $2.33 million,
or $1.80 a share in an off market share transfer, according to a Blue Sky statement to the Unlisted platform. Their
investment vehicle, Blue Star Corp, is now the third-largest shareholder of Blue Sky. Its shares last traded at $1.10.
Huang exports New Zealand red meat, spring water, juice and chocolate to China through a separate company he set up in
September, Everlast International, and with his business partner Zheng, he had been looking for a suitable investment.
Blue Sky had a good management team and produced quality meat and “we want to share” in its growth, he said. He expects
it to make “good profits” in 2014. Huang also operates an immigration consultancy in Auckland called Everlast
Consultancy.
DAT-Schaub inherited the 11 percent stake of Blue Sky when it acquired Waikiwi Casings in 2010 and had long been looking
to sell the shares, according to its statements.
Blue Sky’s losses widened to $3.88 million last year as it was hit by falling meat prices, changing market demand, a
high kiwi dollar and ongoing recession in Europe.
“Past investment in Chinese relationships” had been critical in delivering cash flow during the difficult periods, the
company said in its 2013 annual report. Its newest shareholder is keen to participate, Blue Sky chairman Graham Cooney
told BusinessDesk.
“Blue Star has relationships with Chinese investments mainly in the food industry as I understand it and so they wish to
have some sort of relationship with us,” Cooney said. “They’ve been a purchaser of some meat, and that will continue and
we’re happy to keep talking to them.”
“The fact they’re a shareholder doesn’t give them any more rights than any other Chinese based purchaser,” he said.
“I’ve told them what it gives them is a preferred status to talk to us.”
Huang and Zheng have joined companies including Oravida, associated with the husband of Justice Minister Judith Collins,
in the rush to supply New Zealand products to China, the world’s fastest growing major economy and the nation’s biggest
export market.
Last year meat cooperative Alliance Group approached Blue Sky about a possible takeover but Blue Sky withdrew from talks
after failure to agree on key terms. Both processing companies are based in Invercargill.
The farmer-led Meat Industry Excellence group has been pushing for closer integration of meat companies in an industry
where processors outbid each other for dwindling numbers of livestock to push through plants with surplus capacity. The
group has gained representation on the boards of Silver Fern Farms, the nation's largest meat cooperative by revenue,
and Alliance, the second largest.
(BusinessDesk)