In the agriculture sector, Bright Dairy, a subsidiary of Bright Food Limited — one of China's largest dairy companies — approached Canterbury's Synlait Milk in 2010 to discuss a business partnership. Bright became a major investor and early infant formula customer, enabling Synlait to grow from a closely held private company into a sophisticated, listed (NZX50) company in New Zealand's largest export industry with a market capitalisation of over $1.4 billion.
Bright Dairy's current investment represents 39 per cent of Synlait Milk shares, which are traded on NZX (SML) and ASX (SM1). Synlait has grown substantially since Bright Dairy's investment and it continues to have a governance role on Synlait's Board of Directors.
In 2013 the board decided to create incentives for dairy farmers to reduce their impact on the environment and improve sustainability of dairy farming.
Lead With Pride™ is an on-farm quality assurance programme that recognises and financially rewards dairy farmers who achieve best practice in dairy farming.
To become certified, Synlait's suppliers must achieve excellence in environmental protection, animal health and welfare, social responsibility and milk quality.
The environmental component is extensive and includes efficient water and irrigation management, effective effluent management, improved biodiversity, soil quality, emissions and energy management.
Bright Dairy believes Synlait's value is in the quality of its raw milk supply. Therefore, protecting the natural environment is not only good farming practice, but it is good for long-term business and social sustainability.
There are many similar examples where FDI is playing a key role in improving New Zealand's environmental impact across a range of industries, which is important for a market that is known globally as being clean, green and a leader in environmental stewardship.
This was echoed at the recent KangaNews New Zealand Capital Markets Forum in Wellington where Minister of Finance Grant Robertson spoke about the importance of New Zealand's clean green brand, how it is a significant competitive advantage and one we must continue to uphold and invest in.
Conscious of the need to preserve New Zealand's natural capital, many local industries are looking at ways to improve their own environmental performance through investment in new technologies and processes.
The capital constraints to developing green technologies are also much less than they were just a few years ago. This includes initiatives such as the Government's NZ$100 million green investment fund to develop green practices and create green intellectual property that New Zealand can export to the world — as well as helping New Zealand meet its obligations under various international agreements.
As New Zealand continues to invest in technologies to meet its obligations under various climate change initiatives, foreign capital will continue to be an important source of funding this transition.