Larundel for its ultrafine wool, now Chinese company considering Cubbie Station cotton farm acquistion

Larundel for its ultrafine wool, now Chinese company considering Cubbie Station cotton farm acquistion
Larundel for its ultrafine wool, now Chinese company considering Cubbie Station cotton farm acquistion

A Chinese company headlines a consortium considering buying Cubbie Station, Australia's largest privately owned irrigation property.

Shandong Ruyi has an application with the Foreign Investment Review Board to buy iconic Cubbie Station, the Weekly Times reported exclusively today.

It said the lobbyist Ian Smith, of lobbying group Bespoke, had been in Canberra to test political support for the consortium's intended purchase of Cubbie.

The Weekly Times report suggests Shandong Ruyi is a Chinese government-backed company, and, if correct, this is likely to reignite the debate over whether Australia ought to have restrictions on foreign governments acquiring land.

New Foreign Investment Review Board chairman Brian Wilson has pledged to make sure investments made by foreign governments are completed for "rational, commercial reasons".

Cubbie went into voluntary administration in 2009 with debts of $320 million.

Cubbie administrator McGrathNicol had previously visited China to find a buyer for the station.

The administrator spokesman advised the Weekly Times that Cubbie was subject to "an ongoing sale process involving a range of interested parties".

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With agricultural and textile processing interest, Shandong Ruyi is one of China's top 500 companies. Its most recent Australian acquistion was one of Victoria's most prestigious country estates, Larundel (pictured above), last November for about $14 million. The Ballarat district property was bought from veterinary product millionaires Paul and Gay Preat. Shandong Ruyi plans to turn the former wealthy Victorian squattocracy farm into a research and development centre specialising in the genetics and breeding of ultrafine wool.

The 1,000-hectare Larundel farm, in Victoria's Western District, had been listed through Jock Langley at Abercromby's Real Estate Armadale with a revised $14 million asking price having initially been listed with $20 million hopes in late 2009.

The Larundel homestead is at Cargerie, near Meredith, set in Paul Bangay gardens.

Its interiors were by designer John Coote.

It was built by the Austin family, founders of the Larundel psychiatric and Austin hospitals.

Last September SMH reporter Paddy Manning noted speculation on potential buyers for Cubbie had centred on locally listed grain grower PrimeAg, potentially in partnership with US fund Perry Capital, or Chinese interests including textile producer Shandong Ruyi.

A subsequent Australian Financial Review report earlier this year noted that Shandong Ruyi was part of a delegation in December 2011 of private and state-owned companies that met in Sydney with Austrade representatives, corporate advisers and industry heads to discuss opportunities in rural Australia.

The Chinese delegation included three representatives from China’s Ministry of Commerce, which recently forecast that the country’s private companies and wealth funds would invest up to $560 billion overseas by 2015.

The Chinese company seeks to capitalise on the surge of affluence in China, creating luxury expensive clothes made from cashmere and exclusive ultrafine merino wool.

Its 100-year plan, detailed on its multilingual website, describes how Ruyi, now in its 55th-year phase, intends to become a global force that is "an international supplier of fine-quality textile products, a leader of the textile-related industry and a provider of top-class products in China".

Shandong Ruyi chairman Qiu Yafu suggested after its Larundel acquisition that company's philosophy was based on Confucius and he sees its role as collaborative, not competitive.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.


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