New Zealand group seeks approval for Colyer Mair purchase
New Zealand’s Lowe Corporation is seeking Commerce Commission approval to buy the country’s largest semi-processor of leather, Onehunga-based Colyer Mair.
A wholly-ownded subsidiary Shanghai-based Richina Capital Partners, Colyer Mair was created last year as an amalgam of Richina’s New Zealand semi-processed leather operations, since when it has turned in a more than creditable performance. In the year to December 31 2001, a combination of good quality hides and favourable exchange rates resulted in the company contributing the lion's share of Richina group's NZ$4.7 million (US$2 million) net profits and a 27% increase in turnover to NZ$138 million. Speaking at Richina’s Annual General Meeting two weeks ago, Colyer Mair chief executive Stephen Randal told shareholders that the company was experiencing its best agribusiness season of the last 20 years and was trading ahead of budget. However, he also warned the availability of hides was likely to be adversely affected by drought, especially on the east coast of New Zealand’s South Island.
Lowe managing director Graeme Lowe says his company sees the acquisition as an opportunity to develop its leather business – and that such a development would fit in well with the strategic plan the company has developed since it sold its meat slaughter and processing operations to Richmond in 1998.
Nevertheless, in a press release issued last week, Alastair Mac Cormick, Chairman of Richina Pacific, was quick to downplay the Lowe announcement: "For an international investment company such as Richina Pacific, such approaches are not out of the ordinary, and discussions with Lowe Corporation are continuing. Shareholders will be advised when there is anything material to report."
Richina Pacific’s other divisions in New Zealand are Mainzeal construction and development. In China, it has Shanghai Richina Leather (which makes shoe leather) and aquarium company Blue Zoo Beijing.
Colyer Mair collects and processes approximately 600,000 cattle hides per annum in New Zealand, mainly to wet blue and some to wet salted condition, and markets these internationally. In addition a quantity of lamb pelts are processed to the wet blue semi- processed stage. The company also operates four fellmongeries in New Zealand, processing approximately five million sheep and lamb skins to pickled pelts annually, again mainly marketed internationally. In addition to its leather processing operations, Colyer Mair holds some strategic investments in some New Zealand meat processing companies, from which it acquires skins and hides for processing.
If the Colyer Mair sale does go through, it would be the second division sold by Richina Pacific this year. In April, the company sold its Mair Venison subsidiary to NZ Deer Farms, a company associated with South Island businessman Howard Paterson. Paterson then immediately sold the business on to meat processing company PPCS for an undisclosed sum.
