“After lengthy negotiations, we found we shared a common philosophy of wanting to produce and market safe quality food.”
The investment deal means that Pendleton Estate will receive a substantial cash injection as well as increased sales opportunities in China. Management will be kept in Australia.
“I have no problem with Chinese investment, the Chinese have been very active in taking shares in wineries and vineyards because of wine growth into China, but I don’t know of any other South Australian food companies where they’ve taken an investment into an integrated agribusiness model (growing, producing, distributing, marketing).
“My view is that Chinese investment is good because we’re not selling at the farm gate, we’re adding value then selling on to China, which is what the wine industry does and which means jobs for more South Australians. We’ve been following the wine industry’s model.
“Part of the investment equity means that we can now more effectively compete against imported product price through economies of scale giving us reduced costs.”
Wylie believes there are rapidly increasing opportunities for Australian producers to export any natural Australian food products into China.
“Honey is going really well, along with preserved milk products (powdered formula and UHT), olive oil, canola oil, fruit juices, certain seafoods and meat – 40 per cent of meat imported into China is Australian.
“The Chinese are proactive about their health. They want to eat safe food for their health, which is why they take Australia olive oil and red wine – they’ve heard it’s very good for them.”
On the photo: Pendelton Estate managing director Grant Wylie in China promoting olive oil.