Shanghai Pengxin takes possession of Crafar farms

The Crafar family farms put into receivership three years ago are now legally in the hands of their new Chinese owner.

The Shanghai Pengxin group had to overcome legal challenges from New Zealand farming and Maori interests but finally took possession of the 16 North Island farms on Friday.

Spokesman Cedric Allan says the aim is to lift production on the 13 dairy and three dry stock farms under the management of the state-owned farming enterprise LandCorp.

He says a business plan has been approved and almost $16 million will be spent on the farms in the next three years to upgrade the properties with a view to increasing milk production by about 10% in the next few years.

Mr Allan says Shanghai Pengxin is still considering whether it will set up a joint venture processing plant or get someone else to manufacture the consumer dairy products it plans to sell in China.

He says it spent well over $200 million to acquire the farms but that's only the starting point.

Receivers Korda Mentha say they're pleased to get a final settlement at a price that was by far the best on offer. They have had to run the farms for three years and Brendan Gibson of Korda Mentha says the receivership was one of the most difficult and complex they have handled.

Next story in Rural: Pros and cons in Fonterra's trading system