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Home / New Zealand

Federated Farmers: Export value It takes bottle to succeed

By John Donnachie
NZME. regionals·
4 Jun, 2015 05:00 PM4 mins to read

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Miraka chief executive Richard Wyeth says he is not overly concerned about the recent downturn in the dairy industry's fortunes.

Miraka chief executive Richard Wyeth says he is not overly concerned about the recent downturn in the dairy industry's fortunes.

The Government often highlights the role Maori will play in growing the primary sector and how it will drive increased export value.

MPI has identified 1.5 million hectares of Maori land is in collective ownership, with 80 per cent currently underperforming or under-utilised.

Still, MPI anticipates the Te Ture Whenua land law reforms will help realise the potential of these lands.

Maori owned dairy processing enterprise Miraka can be seen as a luminary after recently winning the inaugural New Zealand International Awards for Maori Excellence in Export.

This company of Maori trusts and incorporations has a reported combined asset base of more than $1 billion and collectively they milk 18,000 cows.

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Its productive and innovative operation is a blueprint for not only Maori but any primary sector business looking to increase competitiveness.

Miraka (Maori for milk) is based in Moeka near Taupo and annually processes 250 million litres of milk into powders and UHT products.

The company with 10 shareholders (eight Maori) encapsulates the Government's vision of an environmentally friendly business, which has strong links to its local community with a growing global export market to boot.

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Proactive towards reducing greenhouse emissions and its carbon footprint, Miraka meets the Government's criteria for social license. Their processing plant is powered by one of the Central North Island's unique assets, geothermal energy.

Water extracted from the milk is irrigated on to farms next to the factory. While biological waste is recycled through composting at a local worm farm (vermiculture).

The worm castings go to a nearby native plant nursery where they are used for riparian planting.

Chief executive Richard Wyeth told the The National Farming Review that Miraka was prevailing in what were challenging times for the dairy industry.

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He was unduly worried about the downturn which affected commodity prices as the food industry was driven by a growing global population, so the "fundamentals" always exist for future recovery.

Miraka would continue building on its UHT Whai Hua programme with the Primary Growth Partnership (PGP) and optimising its commodity business which exports to 23 countries.

In partnership with 100 farms, all within an 85km radius of the processing plant, the company is not driven solely by shareholder returns.

"Of course we seek shareholder return on investment but we also believe in looking after those farmers we are aligned with. Six shareholders actually have cows on farm," Mr Wyeth said.

The local community has also benefited in the past few years, with a reported $5 million injected into the rural economy courtesy of the Miraka's price premium pay out to milk suppliers.

Shareholders meanwhile upheld traditional Kaitiakitanga values where a long-term view towards future generations and guardianship of land was incorporated into the overall business strategy.

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While the company had a close-knit network, it depended on overseas strategic alliances to enhance and build its export market, having fostered a partnership with Vietnamese milk manufacturer and dairy producer Vinamilk.

Mr Wyeth was aware of Export NZ's "collaborate onshore to compete offshore" mantra but for Miraka that was not necessary.

"We have a man on the ground in China and in other countries we have stakeholders who look after our marketing and distribution. We feel that is best way to do business as those people have a better understanding locally," he said.

And having distinguishable Maori branding was an advantage too?

"We like to think so. We always invite international customers on to our site and they are greeted by a traditional Maori welcome with a powhiri -- it is a unique selling point as it personalises and builds relationships," he said.

There were, however, no shortcuts to building export capability.

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"I hear many times those words 'export value' but the reality is it's not easy to achieve. It is very difficult to get established and in a short time frame. It takes lots of patience and perseverance."

Finding the right partners was key and that might take years. You had to have the capital to speculate, especially if you are seeking those long-term sustainable returns and, you should prepare for losses initially.

Mr Wyeth said: "It takes leadership and courage to succeed. That's easier said than done and there are no guarantees. Our UHT programme is a 10 year development and it may lead to nothing."

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