Brierley Penn: Maori Inc leverages its natural resources to crack China market

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Grab bag of natural resources gives added cachet when it comes to talking deal-making

Photo / Warren Buckland
Photo / Warren Buckland

There is huge potential for Maori businesses to play a role in the China growth story, but unlocking this potential requires a concerted strategy, based on leveraging key strengths.

"The big story in global markets at the moment is about the alignment between natural resources and China's growing needs," says David Harrison, ANZ's Head of Maori Relationships.

New Zealand Manuka managing director Jeremy Gardiner agrees.

The manuka honey producer has partnered with Chinese pharmaceutical powerhouse Tong Ren Tang Pharmaceuticals to retail its products throughout the Chinese firm's 1700 outlets in tier 1 and tier 2 cities.

Says Gardiner, "They were looking for suppliers, and they recognised the importance of the product itself, and the connection to the resource."

The New Zealand Manuka deal was one of the commercial outcomes of a "Maori Inc" mission to China last year. A cross-section of the $37 billion-plus "Taniwha Economy" joined Maori Affairs Minister Pita Sharples on the 10-day mission visiting Beijing, Guiyang, Shanghai, Guangzhou, Jiangmen and Hong Kong.

The immediate upshot was a $60,000 scholarship fund set up by Te Puni Kokiri (TPK) for young ethnic farm managers from Guizhou to gain training and experience in New Zealand and the exclusive distribution agreement with New Zealand Manuka.

Among the business delegates: New Zealand Manuka, Wakatu, Central North Island Holdings; Maori Trustee, Maori Tourism, Poutama Trust, Ngai Tahu Seafoods, Te Wananga O Aotearoa, Whale Watch Kaikoura, Federation of Maori Authorities, ANZ, Kiwi Media and Kahungunu Asset Holding.

Partnerships have since been under discussion between Central North Island Iwi Holdings and China National Buildings and Materials to establish wood processing plants in the central North Island. Wakatu has also progressed an arrangement with Dynasty (one of China's top three wine distributors) to have its premium Kono and Tohu wines distributed to high-end hotels and restaurants.

But the central play is China's thirst for resources, which Maori businesses - many of whom have large stakes in key New Zealand resources - can offer as a selling point to Chinese consumers and strategic partners. This is a factor Maori Trustee Jamie Tuuta has centre-mind as he progresses his own discussions with Chinese players (see adjoining story).

The growth of China as a premium market is also a drawcard for Maori producers of top-end products. For New Zealand Manuka, says Gardiner, China is the highest-quality market in which they operate. "They want to work with a premium global brand, and stemming from that, they expect quality," he says. "They require the highest quality of testing - 20-odd tests are required for each batch of honey that we send over."

ANZ's Harrison says "Brand Maori" can become an important part of the overall New Zealand story in China. "The value of culture is that it can be a differentiator in a market saturated with brands... although at the end of the day, you still need a quality product." He suggests there remains a lack of international understanding as to who and what "Maori" is, but that with continued education, the unique Maori brand can play a significant role in marketing New Zealand products."

Federation of Maori Authorities chief executive Te Horipo Karaitiana, credits Pita Sharples with having generated positive movement for Maori in China.

"We've found Minister Sharples resonates with the people there. He's set up some high-level meetings that certainly wouldn't have been possible if we, as private New Zealand enterprises, had tried on our own."

"Many of the tier 1 cities like Beijing and Shanghai are highly competitive, and trying to get a space in that highly competitive environment is quite challenging," adds Karaitiana. "Minister Sharples has decided to focus on a particular region in terms of building a relationship. The Chinese Government is also keen to see the uplifting of some of their minority groupings over there, so that region Minister Sharples is focusing on is where there is a predominance of minority groupings, so there's some alignment there."

Karaitiana emphasises the risks involved in entering the Chinese market, but is confident that much of this danger can be controlled through strategic progression and adequate planning. "China is one of the most difficult and challenging business environments that I have experienced. It's not easy doing business up there, but strategically China has to be a focus, and is a focus for New Zealand. You need to be clear in your approach and a country-wide strategy is literally impossible for any New Zealand company, so we need to think through our platforms and points of entry."

Notes Harrison, "It's important to do your due diligence on who you're dealing with up there, and who's behind who, and often that's certainly not as simple as it appears. The person you're talking to may not be the person actually influencing the situation. As you track things back, you understand how the China Development Bank and the big SOEs up there effectively appear to implement the Government's macro-policy around resource acquisition globally. "

"We shouldn't be novices about China, they are very calculated," Karaitiana cautions. He leaves us with the reminder that the Chinese word for opportunity and danger have the same character. "China is a paradox. We have to be there, but we have to be cautious. We have to learn by doing, and we also need to make sure that it's a measured approach. It's a journey, it requires leadership and commitment."

Taniwha economy
$37 billion plus
10 per cent milk products
12 per cent red meat exports
25 per cent forestry products
37 per cent fish quota

* The inaugural Taniwha & Dragon Festival will be held on April 27 at the Orakei Marae in Auckland. It will celebrate the many bonds - old and new - shared by Maori and Chinese peoples.

- NZ Herald

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