Overseas sales and xenophobia

Fisher & Paykel Appliances Holdings Ltd. washing machines. Photo supplied.
Fisher & Paykel Appliances Holdings Ltd. washing machines. Photo supplied.
Fisher & Paykel has a place in the hearts and minds of many New Zealanders.

The company was formed in 1934, after young friends Woolf Fisher and Maurice Paykel managed to sell surplus refrigerators that had been imported by Paykel's family company - Paykel Brothers.

In 1938, import and foreign exchange restrictions forced the firm to consider manufacturing.

Orders were sourced on the basis of a mock-up and production of Kelvinator washing machines was started.

In the South, Fisher & Paykel has been the employer of thousands of people in and around Dunedin and Mosgiel.

Its production plant on the Taieri produced world-class whiteware thanks to its skilled designers and engineers. Royalty and politicians were seen gracing the factory floor, happy to be associated with a successful New Zealand-owned company producing whiteware and kitchenware on a par with the best in the world. The now famous DishDrawer arrived on the global stage after being shipped out of Port Chalmers.

But times changed. Fisher & Paykel was split into two companies - Appliances and Healthcare. The more concentrated direction appeared profitable for the company.

So it was with great sadness and a sense of disbelief that news of the Taieri plant's closure was announced at a press conference in Dunedin in 2008.

The Dunedin City Council pledged its support for out-of-work staff and the Appliances company committed to keeping its spectacularly successful design team in Dunedin.

Recently, control of Fisher & Paykel Appliances, the company which maintains a presence in Dunedin, passed quickly and almost quietly into the hands of the Chinese-owned Haier Group. Haier already owned 20% of FPA after effectively rescuing the company in 2009, when it acquired the holding as part of a capital raising that let FPA refinance its debt. FPA got distribution into China as a result of the deal and the ability to further licence its technology.

Haier originally offered $1.20 a share for a total takeover of FPA. But, in all honesty, the company must have known it would have to lift its price. When it announced the offer was $1.28, it secured enough large shareholders - and the independent directors - to take it to owning nearly 52% of the company.

While the semantics would suggest that 52% ownership means the company is still in Kiwi hands, the reality is that a controlling interest is just that: controlling. (Haier's offer is still subject to Overseas Investment Office approval, but it seems a formality.)Compare then the ease with which Haier took control of a long-established New Zealand company with the prolonged struggle by Chinese company Shanghai Pengxin to buy 16 central North Island Crafar farms. It now hopes to settle the purchase of the farms after the Supreme Court last week removed the last obstacle to the deal, an appeal by Maori trusts.

While it would be easy for Haier, a global whiteware group, to shift FPA to China, it is impossible for Shanghai Pengxin to shift 16 dairy farms anywhere. It seems xenophobia ruled in the farm debate. Why should the Chinese be allowed to buy New Zealand farms, the critics howled?

And compare that reaction with the welcoming of recent news that Canadian film-maker James Cameron continues to expand his south Wairarapa property portfolio.

Incidentally, Mr Cameron's neighbour, American billionaire Bill Foley, has won permission from the Overseas Investment Office to expand his Kiwi-based wine operation.

However, just like Haier, it is likely both Mr Cameron and Mr Foley paid market rates for their purchases. If the Maori trusts, and their benefactor Sir Michael Fay, had been truly serious about buying the Crafar farms, all they had to do was offer a higher price than that being offered by Shanghai Pengxin.

Xenophobia is not the determining factor in such sales: shareholders make their own decisions based on price and their own circumstances.


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