Editorial: Food giants get ready for growth

It is not all one-way traffic from New Zealand to Australia as recent significant business decisions by Heinz-Wattie's and McCain Foods have shown.

The giant food-processing companies have targeted Hawke's Bay for future growth. McCain has pumped $19 million into an upgrade of its processing plant here while Heinz-Wattie's King Street operation will expand its output at the expense of three uneconomic Australian locations.

Higher volumes of throughput from Heinz-Wattie's and McCain were part of the reason for another record year for the Port of Napier in 2011, which made a tax profit of $10.86 million, up $2.17 million on the previous financial year's normalised result.

The port's profit resulted in a $5.71 million payment to its owner, the Hawke's Bay Regional Council.

There are some interesting links here: The regional council (and, presumably, the people of Hawke's Bay) benefit when the port prospers. The port prospers through increased cargo from the likes of Heinz-Wattie's and McCain. The food processors can expand if they can get reliable supply of crops from our growers. The growers need irrigated land to guarantee their crops. The regional council is the prime instigator of plans for a $200 million irrigation scheme to transform the growing potential of the Ruataniwha Plains.

Early financial modelling suggests a $300 million a year boost to the region's gross domestic product from the dam and irrigation project.

Assuming the concerns of conservationists and iwi, particularly around water quality in our rivers, can be acceptably managed to allow this proposal to proceed, irrigation of some 25,000ha of the Ruataniwha Plains will be by far the biggest economic development project in the region. It will be a significant project for the nation. Jobs will be created.

Which takes us back to Heinz-Wattie's and McCain Foods, who are aware of the proposal to irrigate the Ruataniwha Plains and, to some extent, are positioning themselves to be ready for such an eventuality.

Hawke's Bay offers benefits to these companies even without the proposed irrigation scheme (cheaper labour than Australia, first class produce from the Heretaunga Plains, a capable port at Napier) but the potential for reliable crops in the future from the expansive Ruataniwha Plains would be huge for them - and for the people of Hawke's Bay.