What argibusiness CEOs are saying - Sir Graeme Harrison

Graeme Harrison, chairman of the New Zealand International Business forum. Photo / NZH
Graeme Harrison, chairman of the New Zealand International Business forum. Photo / NZH

Sir Graeme Harrison Anzco Foods

Sir Graeme Harrison says if he could single out one change to improve New Zealand's economic lot it would be to "unleash the country's best current potential economic multiplier - water".

The Anzco chairman and part-owner says plentiful water is a huge competitive advantage the country has not yet fully grasped. "We use less than 4 per cent of our water in one form or other."

The Budget earmarked $80 million for regional irrigation schemes. Harrison says the Government has dragged its feet and that money should have been forthcoming much earlier. "They are getting on with it but it has been slow ... the reality was that in the first term it got some attention but not a hell of a lot."

Harrison says "restoring business profitability after our first NZ generated loss in 29 years since establishment" during what was a rough ride for profitability for all the big meat companies is his best achievement in the past 12 months.

His top three business priorities in the coming 12 months are:

• Finding a workable NZ meat industry solution to remove excess processing capacity

• Progressing business growth in China

• Progressing our Food Solutions and Healthcare business activities.

He says meat companies spend too much time and money securing livestock from farmers and not enough on developing their markets.

He is backing a complicated tradeable slaughter rights scheme dreamed up by industry consultants in the 1980s but never actually put into action as the least painful means of reducing capacity to match reduced livestock numbers.

Meanwhile Harrison is breathing a sigh of relief after Beijing granted import licenses to Anzco beef plants earlier this year after a long impasse.

The company had been largely shut out of the Chinese market until Prime Minister John Key raised it at a meeting with the new leadership in April.

"I think from a business perspective we have the most able person able to lead us in terms of setting up relations in Asia that I have seen as a New Zealand Prime Minister ... and I have seen a few over the years."

Harrison says after the Prime Minister's intervention the US' 56-year tenure as New Zealand's top beef market will be broken by China within the next five years.

Doug Ducker Pan Pac

Doug Ducker is "slightly more optimistic" about his industry's prospects for the next 12 months than he was a year ago. Whirinaki-based Pan Pac Forest Products owns substantial cutting rights in Hawke's Bay which it processes into wood fibre for its parent in Japan, Oji Paper, and also for its own lumber and log exporting businesses.

Booming demand from China has pushed up prices for logs which the company buys in to supplement its own wood, and squeezed profits at a time when timber and pulp prices remain depressed.

Although Ducker is confident a shift in gears in China's growth locomotive will boost demand for its products at some stage. "As China moves out of its export mode and turns its focus to the well-being of its population, that will give some degree of lift to internal consumption that will be useful for some of the product grades that we make."

Pan Pac is modifying its plant to produce materials suitable for higher value products such as perfume boxes and cigarette packets. It is also hoping for a moderation in log prices as China shifts away from heavy investment in infrastructure and as more local forests mature.

"Looking out five to seven years we start to see additional fibre becoming available to us from the plantings that occurred back in the 1990s and that gives us the capacity to look at changing what we are doing."

Any positive knock-on from the US housing recovery and Christchurch rebuild will be limited as Pan Pac's grade of timber is used in furniture and joinery rather than high volume structural framing.

The top three domestic economic headwinds as listed by Ducker are the high dollar, wage increases and energy costs. Pan Pac is an energy-intensive company and Ducker is dismayed at continuing high electricity prices, although he doesn't believe Labour and the Greens' plans for a central buying agency will bring down prices. Neither is he convinced the Opposition policies would be effective in bringing down the dollar.

Ducker's top three priorities for Pan Pac for the next 12 months are:

• Securing manufacturing profitability

• Optimising recent capital expenditure

• Ensuring to productivity among its workers.

- NZ Herald

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