PGG Wrightson gets govt backing in $14.6m seeds research
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(BusinessDesk) PGG Wrightson, the New Zealand rural services group controlled by China's Agria, has won government backing for a $14.6 million research programme that aims to improve seed quality and plant species.
The government will invest $7.15 million over six years through its Primary Growth Partnership fund in a Wrightson-led initiative to lift animal productivity and reducing environmental impacts, the Ministry for Primary Industries says.
The balance will be picked up by Wrightson and its research partners.
The programme seeks to establish faster and more reliable pasture, increase pasture productivity and persistence, cut greenhouse gas emissions, improve animal health and lower susceptibility to summer droughts.
"Co-funding of these projects by government and industry is what PGP is all about," Primary Industries Minister David Carter says. "Every New Zealander stands to gain from innovative investment in the primary sector because our food, fishing, fibre and forestry industries are pivotal to the success of the economy."
Wrightson's seeds business was widely seen as the attraction for China's Agria Corp taking a controlling 50.01% stake in the company in a $144 million deal.
Its agri-tech unit, which has been building its seeds business, increased revenue 3.6% to $435 million, though earnings fell 21% to $30.1 million in the latest financial year.
PGG Wrightson Seeds general manager of research and development David Woodfield says the funding will let the company build a suite of new technology to keep New Zealand farmers internationally competitive.
Wrightson shares were unchanged at 35 cents today and have shed 7.9% this year. The stock is rated an average "outperform" based on five analyst recommendations compiled by Reuters with a median target price of 43.5 cents.
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Comments and questions11
Doesn't this mean the Government is funding $7.15M in research to improve the Chinese economy. It is widely known that Agria purchased PGG Wrightsons for the seed technology that they can export back home.
They have billions of acres of spare land back in China to grow the product that is derived from the research. They will only use the crops grown on the Canterbury Plains to test the research etc. Most of the gain wil be extracted in China.
Wouldn't it have been better to fund a NZ owned company?
So right, nothing to do with plant breeding ,ministers using taxpayers money to fatten friends companies has been around a long time.
A long long time.
The Minister must be very clever to make such a strategic investment on behalf of the taxpayer. Was PGGW not going to do so itself without tax money?
If this is so good should we not all volunteer to pay more tax so that the clever Minister can make more astute investments?
Mind you if my company was a recipient I would go to great lengths to show how valuable this type of picking winners is!
Had a NZ company stepped up to the plate when pgw needed a hand the company would have been contolled by a kiwi company and not agria. Sadly no kiwi company seemed to see any decent value in pgw at the time, and going on the current shareprice, few see much prospects in it at present. Did agria pay too much for a controlling interest?
So where did this money come from? Emissions trade schemes or windfall agriculture taxes?
I thought the days of govt. picking winners and crony projects was were the "bad old days"?
Does this help!
PGGW Chairman, "Sir John (Anderson)is currently Chairman of TVNZ, Capital & Coast District Health Board, the New Zealand Venture Investment Fund .........."
There is more thru. farms etc.. Maybe a job for Penny (not so) Bright.
Interesting, I thought we already had a crown research institute called Agresearch??? Maybe I am wrong and my neighbors who work for them are merely are phantom's of my imagination? There are a number of NZ owned seed and forage companies who have leading research going on already. I would hope against hope, they at least got a look in on this bid!
"I would hope against hope, they at least got a look in on this bid!"
Not a hope in hell unless they show the Minister that it is worth his while.
That is agri' politics, this minister is Muldoon trained.
And I tell you what, Muldoon would of had his work cut out training this guy anything.
Where does the money get spent? On salaries etc mostly to New Zealanders!
You lot prefer the NZ government to continue paying hundreds of millions $$$$ on New Zealanders on the Dole and DPB producing more kids, right?
Dragon your logic is suspect
Ofcourse kiwi's will be employed to do the research. But the full benefit of that investment will end up in huge seed farms in China.
Just so you understand what that means - the benefit to NZ is very short term and the long term benefit is to the chinese owners and the Chinese agricultural economy.
I have absolutely nothing against the Chinese - in fact, I support most things they do and recommend strong business links with them. But to support them to take our IP is bloody stupid.
So,all governments are in the business of picking winners.
Let's just hope they have carried out a full and competent analysis before handing out our money?
liberte