Past becomes future for new AgResearch

By SIMON COLLINS, science reporter

New AgResearch chief executive Dr Andy West says his top priority when he starts work at Ruakura on May 3 will be to "make farmers richer".

West, who led the officials team which created the crown research institutes (CRIs) 12 years ago, believes AgResearch has veered off-course by putting its own profits ahead of supporting farmers and the companies that serve farmers.

"The pastoral sector is a little bit frustrated about AgResearch's position and what it's been doing," he said. "They want AgResearch back."

West told the Herald that he approached AgResearch late last year, months after the company started an international search for a new chief executive to replace Dr Keith Steele, who has retired.

He said he was frustrated with his role as chair of the Tertiary Education Commission - "two steps removed" from the heads of the universities and polytechnics who run tertiary education.

He had enjoyed being chief executive of the Institute of Geological and Nuclear Sciences between 1997 and 2001.

"I wanted to be a chief executive again. I wanted to be in the thick of the action," he said.

"And I have a particular love of agriculture and the primary sector, so this job appealed.

"I had known it had been around for a while. My wife and I just thought more and more about it, and in the end thought it's too good an opportunity to miss."

He had his first interview for the job in November, met the AgResearch board led by new chairman Rick Christie, and found that it was "very clear about what it wants to achieve".

"I am confident the Government will come in behind as well. They have made very clear signals about wanting to see the CRIs help maintain the momentum of various industries. I see that as just our fundamental raison d'etre," he said.

Although founded to support pastoral farmers, AgResearch adopted a goal in 1999 of becoming "a global $200 million life sciences business by the year 2004".

With 1300 staff and revenue last year of $130 million, including $68 million from non-government clients, it is already probably New Zealand's biggest biotechnology company.

West sees it staying as a biotech leader, but also reasserting its original role. His three goals for the company are:

* "To improve the prosperity of farmers - to make farmers richer - and all those associated with farming in dairy processing companies, meat processing companies and so on."

* "To introduce a range of biotechnologies to New Zealand."

* "To ensure that AgResearch is a vibrant, happy company."

"We have to re-establish a relationship with farmers," he said.

"Farmers want that relationship. So the best thing you can do to get it established is to have your key scientists talking to farmers."

He said that in the past few years, AgResearch and New Zealand generally had "got it into its head that a knowledge economy is all about new things".

"While there is some legitimacy to that, fundamentally New Zealand will not move forward unless it is led by the dairy, meat, forestry, fishing industries. It's got to be those industries that are changing. We can't bypass them," he said.

"We have to raise the productivity of those sectors to make farmers more prosperous.

"That is about new products and all sorts of things, not just being efficient."

He believed AgResearch could make a profit while staying "fixed on serving New Zealand".

But he questioned the recently fashionable strategy of creating new companies, rather than licensing new technology to established companies.

The AgResearch board has already initiated a review of its commercial arm, Celentis, which is likely to shift its emphasis to licensing deals modelled on some of the deals done by Auckland University's UniServices.

West plans to strengthen relationships with companies such as Fonterra. AgResearch has worked with Agriculture Victoria on cow genetics since the late 1990s, leaving Fonterra to set up its own genetics research.

The president of the industry group NZ Agritech, Colin Harvey of animal remedies firm Ancare, said this month that AgResearch also saw itself as a competitor with, rather than supporting, local agritech firms.

West responds: "AgResearch needs to develop excellent relationships with Fonterra, Anzco, PPCS, Wool Equities - and if you're talking about the suppliers to the sector, then I absolutely agree.

"There is a tremendous opportunity in the Waikato for AgResearch and the University of Waikato and Waikato Polytechnic to be working together to help that agriculture servicing sector, such as the Gallaghers and TruTests, to activate their development.

"I want Ruakura, for example, to be looked on like it used to be. I want AgResearch to be seen as the single most important resource of knowledge for pastoral farming.

"It can't do it on its own. We have to work closely with the sector and the New Zealand universities and with other research institutes such as Canesis."

AgResearch has an established relationship with the sheep research firm Ovita, in which it holds a one-third shareholding. Ovita chief executive Damian Camp said the firm was renegotiating its research contracts but did not plan to reduce its contracts with AgResearch.

"We have a couple of smaller contracts with Oxford Brookes University and Wyoming University, and we are in discussions with a number of Australian research organisations.

"It's very focused-type research, things like elucidating the structure of particular molecules, short-term things that we need to get done very quickly. AgResearch is much more the longer-term partner."

AgResearch also has biotechnology partnerships with Auckland and Otago Universities and this month announced a proteomics laboratory (to study proteins) at Wellington's Victoria University.

West said AgResearch's biotech potential extended into human health and nutrition as well as traditional farming, and it needed to tap into research being done in the US and Europe.

"We are going to have to find a way of working not only in New Zealand but with North American and European scientists and technology companies in a way that we can contribute to them and we can take their technologies back here," he said.

"It's not all genetic engineering. GE is one biotechnology, but that is a much too limiting view. It's technologies to do with the fertility of animals, to do with animal health, it's technologies to do with basically the configuration of food production and stuff like that.

"To talk about food in a traditional industry is not the right way to talk about it. The science has got a long way to go to understand the importance of nutrition in health. We have a role to play in that.

"Equally importantly, you take it back down the chain to the farmers and say we can produce it but only by changing the way we do it on the farm. AgResearch has a very important role to play there.

"AgResearch is back. It's going to become, once again, the absolute fuel cell of agriculture."

AgResearch

* A Crown-owned research and development company with its headquarters at Ruakura, Hamilton.

* Comprises:

AgResearch Science, a research organisation targeting new biotechnology-based food industries, "clean green" food industries, environmental improvement.

Celentis, a wholly owned subsidiary aimed at commercialising science in three areas - animal drug delivery, neutriceuticals, and food industry measurement systems.

* Employs 1300 staff.

* Earned revenue of $130 million last year.