Salmon primed for Aussie export drive

Henry Studholme has built a new business on smoked salmon. Picture / Simon Baker

When Henry Studholme's farming dream was quashed during the tumultuous Rogernomics years, smoking salmon seemed the least likely venture he would turn to.

As one of the 1200 farmers who walked off their land when farming subsidies were slashed in 1989, he lost everything he had worked hard to build and, at the age of 39, was finding it hard to get another job.

But five years later, through determination and hard work, he found his answer in a former honey-processing factory on a small piece of land at Hororata, 56km west of Christchurch.

He now employs 20 fulltime staff in his Prime Foods business, which processes 300 tonnes of salmon annually and sells to supermarkets throughout the country.

The business is now gearing up for a major growth leap as it is prepares to export to Australia in June.

Farm-raised Studholme reared sheep and cattle on two blocks of land at Glenroy and Te Pirata, Canterbury, from 1977 to 1989. But the farming dream disappeared when changes to subsidies and a sharp rise in interest rates saw Studholme left with little option but to sell his farm for a "giveaway price".

"Muldoon encouraged us to borrow money to develop our farms. But, when Roger Douglas arrived, we were dead ducks - interest rates climbed to 20 per cent. We lost the lot."

With four daughters under 13 at the time, he found the next few years some of the hardest ever to make ends meet.

He relied on farm-labouring jobs and his wife, Jenny, returned to nursing.

In 1990, a $45,000 start-up grant awarded to displaced farmers helped the family to buy a house on a 3.4ha block at Hororata.

On the land was the disused factory - the former premises of a failed honey-processing business - and, in 1994, he decided to put it to use. A friend involved in salmon farming suggested he try smoking the fish.

With a partner, the Studholmes sought a small loan to buy a second-hand smoking machine and spent a lot of time at the local library researching the craft. That research came up trumps with the discovery of a Scottish recipe dating from the 1950s.

It was all trial and error to start with but, six months later, they began selling the Prime Smoke salmon brand to the public.

"They were interesting times; it really was a family affair. We didn't have any capital and had to fund everything from cashflow," said Studholme.

Things really got going in 1997 when an Auckland company asked them to pack salmon for its brand.

Clients were developed one by one around the country before the breakthrough into supermarkets, where the margins were better.

An export licence allowed the Studholmes to sell overseas, first to New Caledonia and Tahiti.

Another big break came in 2001 when a Japanese company approached them to supply Prime Smoke salmon to its chain of 500 restaurants. However, the contract was lost after the dollar started to climb.

But that was offset somewhat by winning the contract to pack salmon for supermarket chain Progressive Enterprises' house brand, Signature.

Prime sources its salmon from Stewart Island. The fish are skinned, filleted, brined, marinated, smoked, sliced and vacuum-packed at the Hororata factory before distribution.

Prime Smoked is the biggest-selling product in cold and hot-smoked salmon, while Studholme Smoked Salmon is the premium range, sold with a sachet of wasabi cream or Middle Eastern yoghurt.

Smoked mussels and marinated salmon are also in the range, and Prime imports Apple Crisps and heat-and-eat pre-cooked meals, which it sells under its Studholme brand.

National sales are contracted out to an Independent Fisheries team of sales reps, which keeps Studholme free to manage exports and the finances.

Japan is the biggest export market, followed by Singapore and Dubai.

But exports are only 20 per cent of total sales. That should change in June, however, when Prime crosses the Tasman for the first time.

The Australian market had proved difficult to crack earlier because of retailers' loyalty to the "buy Australian-made" policy.

Prime will be sold through Woolworths' 700 Australian supermarkets and Studholme expects volumes to overtake local sales.

"It's difficult to know how big Australia could get, but it has a lot of potential for us," he said.

As Prime's future growth will come from exporting, Studholme is in the preliminary stages of investigating European markets.

Studholme bought out the original business partner in 1997, so the business is 100 per cent family-owned.

And he intends to keep growing it. On the way are a couple of ideas for new products which the company will be in a better position to develop once the original factory is expanded.