Regions Taking on The World
Hon Jim Sutton
Member of Parliament for Aoraki
Minister of Agriculture, Minister of Forestry, Minister for Trade Negotiations, Minister for Rural Affairs, and Minister for Biosecurity
Speech Notes
Ladies and Gentlemen: I am delighted that this meeting is being held in my home patch, South Canterbury.
This region has taken good advantage of its natural resources, and can demonstrate many of the things this Government is looking to promote nationally.
There is a tendency by some commentators to think that innovative and noteworthy things happen only in Auckland, and sometimes in Wellington and Christchurch.
South Canterbury - like many regions around our country - contradicts that.
South Canterbury, and Timaru in particular, has experienced accelerated growth recently - the local economy grew by 4.7% for the year ended May 2003.
Local development agency Aoraki Development Trust believes there is a range of factors driving this growth:
- The region is taking what it's always been good at (agriculture) and adding value. For example, we are becoming the biggest potato growing region in NZ, but we are not just selling the potatoes, we are also making them into chips, for example.
- Good infrastructure/central location - a good deep water port - Maersk Line have regular scheduled services to South East Asian and American hubs, and P and O Nedlloyd started a new fortnightly trans-Tasman service in September which is good news for local exporters.
- The region's 'mindset' is changing - people are learning to collaborate to compete for which no one agency can fully take the credit. For example, there is a business friendly council, and the South Canterbury Chamber of Commerce has grown 100% in the last 2.5 years, providing much needed support and confidence for local entrepreneurs.
- The work being done by central government (Industry NZ) and now NZTE, alongside the Chamber and the EDA - sense that all these agencies are working together
- Support from the local polytechnic
- Getting clearer about the region's competitive advantage(s) eg one of the best agricultural regions in NZ.
There are some innovative smaller companies which are making their mark.
For example, Denheath Desserts has reinvented the custard square...a Pleasant Point bakery has been developing the 'e square', which is similar to an éclair but with custard in a cube of éclair pastry. They're looking at markets locally and internationally for that one.
Then there is Honey Valley NZ, a small family business that exports 70% of its products to Japan, Singapore, Korea, Malaysia, Indonesia and Germany. Based in Washdyke, the husband and wife team has developed their niche market business based around premium white clover honey to a substantial international export business over the past six years.
Bigger companies make their mark in South Canterbury too.
So we have Pareora, processing meat for New Zealand and the world. When I was in Egypt, I met importers who were full of praise for the frozen product they bought from PPCS, some of which was likely to have come from around here.
We have Clandeboye, one of the world's larger milk processing plants, which Fonterra announced this month is about to get larger with a new drying plant next financial year, and another 25 jobs.
Part of that expansion is linked to the development of our port here at Timaru.
PrimePort has worked hard to be an efficient and effective partner to the shipping lines that use this port, and to the companies that have their products carried out of Timaru by those shipping lines. It's paid off with Timaru being an important part of the schedule of Maersk and P&O Nedlloyd.
Not entirely coincidentally, Timaru is a major cold-storage centre.
So, working away and applying technology to traditional methods, South Canterbury has become a quiet achiever.
Many regions in New Zealand are like this.
The editor of NZ Business monthly magazine, Annie Gray, says "New Zealand "will live or die" dependent on the strength of the economic growth within our regional hubs. And, outside the main centres, things have looked pretty good for the past couple of years. While nationally, growth might be slowing somewhat now, there are still plenty of positive developments in the regional centres as each province builds on its existing strengths and supports its core industries".
By getting all our provinces working together, sharing technology and innovative ways of doing things, pulling together and using our strengths to best advantage, we will all be better off.
That's what this conference is about: how can we do what we do now, but better. Is there information that
And do we need to change the focus from purely looking at domestic issues, to the broader issues of supplying our products internationally as well as locally.
As Trade Negotiations Minister as well as MP for Aoraki, it gives me great pleasure to see PPCS's meat in Egypt, Abraham's furniture in Japan, Fonterra's milk powder in China, and to be able to talk about my home port with Maersk in Denmark.
But I don't want South Canterbury to be quiet about its achievements anymore!
We have successful businesses and exporters here; we need more.
As a country pulling together, we can become internationally competitive. By building on our region's competitive advantages, we can all play a key role. Progress through collaborating together, not by fruitless competing with other regions, but looking at what other areas do well, and assessing whether we can improve what we do well by learning from them - and them learning from us.
That is what this conference is about.
Now, no-one expects this to happen all by itself. This conference is part of the initial work of pulling industry together with the relevant government officials, and there are a fair few here today.
You might be familiar with Industry New Zealand and Trade NZ - these agencies have been merged into New Zealand Trade and Enterprise from July this year. This new agency is the New Zealand Government's integrated trade and economic development agency, and has 9 offices in New Zealand, and 38 overseas.
NZTE's mandate is to support the development of internationally competitive New Zealand businesses, as part of Government's overarching objective to increase the long-term rate of sustainable economic growth.
They have teams of people around the country, and work is continuing on programmes started by their component agencies before the merger.
That work has been going on for some time. The Regional Partnerships Programme became operational on 1 October 2000 with the objective of facilitating and promoting sustainable regional development by helping regions respond to local growth opportunities.
The programme was developed according to international best practice in local development programmes (as identified by the OECD). The focus on a partnership approach to development, and the importance of strategic planning, regional leadership (governance) groups, and building capacity of local agencies are all best practice attributes of the RPP.
Under Industry New Zealand the programme approved strategic planning funding to all 26 "self-identified" regions; capability funding to the a large number of these regions, and major regional initiative (MRI) funding to five regions (Rotorua (Wood Processing), Hawke's Bay (Food Processing), Waikato (Innovation Park), Manawatu (Bio-Commerce), and Marlborough (Wine).
Since Industry New Zealand merged with Trade New Zealand to form New Zealand Trade and Enterprise, another five MRIs have been approved (Taranaki (Engineering), Northland (Tourism), Nelson (Seafood) and still to be announced Southland and Wellington).
There are other things that New Zealand Trade and Enterprise is doing throughout New Zealand that could have positive spinoffs for businesses and exporters here.
For example, the Polytechnic regional development fund, which is designed to strengthen partnerships between polytechnics, local industry, regional economic development organisations and iwi. It is also designed to encourage skills development initiatives to ensure the best results for our young people and their future employers.
The Fund is a joint project between New Zealand Trade and Enterprise (NZTE), Ministry of Education and the Tertiary Education Commission.
A maximum of $2 million for the calendar years 2003 and 2004, and $1 million for the 2005 calendar year is available.
Thirteen polytechnics and institutes of technology have benefited so far. Examples of from South Canterbury/Otago/Southland:
Aoraki Polytechnic (Timaru)
$47,000 was approved for the Aoraki Polytechnic to create a 'one stop shop' for businesses in the South Canterbury region. The centre will provide a broad range of business advice.
Telford Rural Polytechnic (Balcultha)
$61,000 was approved to Telford Rural Polytechnic to develop a programme to educate farmers in soil/climate-mapping data to improve land based outputs.
Otago Polytechnic
$90,000 to undertake an extensive skills audit of current and future education, training and information needs of all Central Otago industries, in particular viticulture, winemaking, horticulture, tourism & hospitality. Develop and/or modify Polytechnic courses to bridge the identified skills gaps, and simultaneously provide an ongoing education resource centre.
Otago Polytechnic
$55,000 was approved to Otago Polytechnic to assist in the established of business programmes for business involved in tourism in the Waitaki District.
There is also the clusters development fund. Clusters are groups of companies and related organisations that collaborate to grow their business. Using this collaborative team approach allows businesses, regions and interest groups to develop greater speed, quality, innovation and critical mass. NZTE provides funding for clusters to employ facilitators, and also provides a range of tools and advice for clusters.
In our region, we have the Aoraki South Canterbury functional foods cluster, which aims to set a high standard of commercial focus with an opportunity to participate in the $100 billion+ world-market for functional foods. Turning commodity 'good food' into 'particularly healthy food' will deliver potentially higher returns for growers, suppliers, manufacturers, wholesalers and distributors. It was allocated $28,125 each to engage a facilitator in December last year.
NZTE also works in partnership with EDANZ on a number of joint projects eg the EDA best-practice manual, the AUT Diploma in Economic Development, developing an economic modelling tool, and more recently on projects looking at labour and skills issues and research assessing the spend by local government on economic development. This year NZTE and EDANZ are looking at a professional development programme for EDA members to complement the AUT Diploma.
All this work is to enable New Zealand companies to take up the challenge to be all they can be.
That includes all the particular challenges and opportunities in becoming exporters.
Many of you will have seen the chart of our exports - the so-called wineglass chart, which shows that while we have 10,245 businesses exporting, only 158 of those businesses account for almost 77 per cent of total exports, each exporting more than $25 million a year.
New Zealand's biggest exporter is Fonterra at $13 billion with total exports around $40 billion a year. As I said earlier, it's an important business in South Canterbury.
There are some other big local exporters: Summit Wool Spinners (Oamaru) last year exported $30 million wool carpet yarn. They employ 300 people and export 86% of their product
Wool must be back...Timaru-based Alliance Textiles is experiencing increasing demand for its 100% merino, pure wool, thermalweave and infant blankets due to revived interest in natural fibres. They're big overseas as well.
Timaru is the second largest fishing port in New Zealand and is home to Sanfords South Island Limited with its modern sophisticated processing plant located in the Prime Port of Timaru. Sanfords South Island uses its specialised technology to efficiently process fish, caught by its fleet of fishing vessels, for national and international markets.
It's not just primary products that do well here. The Clough Group is the largest producer of agricultural machinery in New Zealand. Based in Aoraki, the Clough Group produces cultivation machinery, seed drills and hay handling machinery. 30% of the machinery is exported, primarily to Australia, and 70% is distributed in New Zealand.
Ladies and Gentlemen: there are some brilliant success stories in our region. It is important that we celebrate these companies and their work. They're providing employment, and they provide some glory for our province that we can all reflect in.
But the message I would like you to take away from this conference is that it is a big world out there. It has a hunger for the high quality goods and services that we can provide. We have some examples of what can be done. I hope that these examples can inspire others. I know that this government is keen to do its part to help, and I encourage people to take up the opportunities offered.
Thank you and good luck for future exporting success.
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