Chinese firm touts NZ's potential as a major bottled water exporter
Thursday, 15 November 2018
Canterbury-based Chinese-owned Cloud Ocean Water says it's helping build New Zealands image internationally and investing millions into the economy.
But it has been a baptism by fire for water bottling boss Feng Liang – Stuff was asked not to photograph faces when visiting the former wool scour it has bought at Belfast on the outskirts of Christchurch, due to the strong negative public reaction.
Water has become big money. A litre in local shops costs about $3 – more expensive than the current price of petrol of about $2.30. It often costs twice as much overseas
Liang said Cloud Ocean's $50 million investment would see it become Lyttelton Port's third largest customer after coal and milk powder, and possibly a client of Port Tauranga depending on future expansion plans.
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* Decades-old consents should not be used to allow for water bottling, court hears**
Cloud Ocean's water resource consents came with the purchase of the aged Belfast factory – a visual contrast with the company's promotional video of pristine mountains and rivers.
Water bottlers have been operating in Canterbury and other regions for several years, and other overseas interests have bought properties recently with consents attached.
Cloud Ocean has been most visible and attracted the most public vitriol.
However, Liang said New Zealand had the chance to build worldwide brands like Evian or Perrier from a sustainable and efficient industry.
Cloud Ocean said its budget for wages was about $15m at full production with more than 200 employees over four shifts, and another $7m for contractors to date.
The Orion lines electricity company was expected to upgrade its local substation earlier than otherwise, and a rail siding would also be connected to the main line.
Cloud Ocean is ultimately owned by China-based Ling Yun Hai Group, the largest producer of sugar in that country.
Liang said global softdrink companies were responding to health concerns so it made sense to meet growing demand for bottled water.
Bottles, cartons and caps will be recycled in China.
The company was still commissioning two automated bottling lines and product was being sent overseas for a retail launch in China next year.
Aside from the cost of the Belfast scour property and an adjacent old tannery, Cloud Ocean paid $2277 for its 1.6 billion litre annual water take.
'There's a lot of discussion about a tax or levy. We'll follow any regulations and build it into our budgets,' Liang said.
He discounted an export tax because it would flout World Trade Organisation treaties.
Cloud Ocean has honed its environmental pitch with the help of spin doctor Jo Coughlan of Silvereye, an experienced operator, and director of Dairy NZ. She is married to Conor English.
Liang said Cloud Ocean took about 0.007 per cent of all consented water use in Canterbury. It is well behind Christchurch City Council's 75 billion litres annually, Heinz Wattie or Silver Fern Farms consumption, and it pales in comparison with the trillions of litres used by rural irrigators in Canterbury.
The company is in the middle of a consenting battle to access a 186 metre deep bore on the site as a back up for the 33m well it already uses. Liang said it wasn't seeking to increase the amount of water taken.
Cloud Ocean bought the Belfast property from Canterbury Land Resources, a company majority-owned by entrepreneur Phil Burmester.
Burmester controls consents for 7.2 billion litres annually that are attached to various other nearby Belfast properties but said he had yet to discuss selling them to Cloud Ocean. Another of his companies, Rapaki Natural Resources at Tai Tapu south of Christchurch has been exporting water for several years.