The giant Chinese Shanghai Pengxin Group Ltd. said Thursday that its wholly owned, Hong Kong-based subsidiary Milk New Zealand Holding Ltd. has lodged an application with New Zealand's Overseas Investment Office for approval to buy 16 dairy and dry stock farms in New Zealand's central North Island. The farms in question, covering some 8,000 hectares, are currently in receivership and receiver Brendon Gibson wasn't immediately available for comment. An OIO spokesman said that once the OIO receives the application it will carry out an initial assessment that will likely take around five days. A full assessment is expected to take 50 days. The Chinese government in September gave ministers greater flexibility when assessing overseas investment applications for sensitive land. Among other things, ministers must consider whether New Zealand''s economic interests are adequately safeguarded and promoted. Any farmland greater than five hectares is considered sensitive land. If the purchase is approved, Milk New Zealand will invest more than NZ$200 million initially to buy the properties and related assets and upgrade the farms over a two-year period, it said in a statement. The company will establish a wholly owned unit, Milk New Zealand Farming Ltd., to run the farms. Spokesman Cedric Allan said the company would prefer to work in partnership with New Zealand processors rather than establish a new facility. The farms will initially continue to supply raw milk to Fonterra Co-Operative Group Ltd., however, "the aim is to add value to the raw milk produced on the farms by developing new products for export to the booming Asian market, recognizing the strong demand for dairy products in China," Milk New Zealand said. It will create and brand baby formula, ice-cream and cheese, among others. Shanghai Pengxin Group has investments in commercial and residential real estate, infrastructure, mining, finance and agriculture, and increasing involvement outside China, the statement said. It currently operates in China and Bolivia, and has agricultural interests in Argentina and Cambodia.