By SIMON COLLINS
The state-owned HortResearch institute is negotiating with a multinational venture capital firm to finance a multimillion-dollar investment in New Zealand horticultural research.
The talks, disclosed by HortResearch chief executive Dr Ian Warrington, mark a further step in transforming the nine crown research institutes into globally connected businesses.
The institutes' drive
for overseas clients, combined with a shift in state funding away from commodity-based research, has alarmed some agricultural scientists.
But Dr Warrington said overseas venture capital would "allow a new area of technology to advance to the competitive advantage of New Zealand."
"We did our market research, found who the market leaders were, approached them and worked backwards," he said. "Our revenue from the project will be a contract for service that will grow out of the pre-commercial development of that product to prove it in various markets."
Dr Warrington said the institute was in "very advanced discussions" with the overseas venture capital company and a New Zealand venture capital partner. The Foundation for Research, Science and Technology had also "responded very positively."
He hopes to conclude a deal in six to nine months and to have work start next year on several of the institute's 10 sites, which include the Mt Albert Research Centre in Auckland and Ruakura near Hamilton.
"Clearly when you are dealing with sums of money that big, you are looking at a collaboration across teams of scientists," he said.
HortResearch's income from New Zealand clients had fallen 30 per cent in real terms in the past decade, forcing the institute to look overseas to keep its 485 scientists available for New Zealand work when required.
Weak support from the local industry led HortResearch to lay off 10 people from its juice research and food technology team last year.
One of them, Norman Lodge, said last week that most scientists in the team were still out of work.
"We have lost a large quantity of experience that could have been gainfully redirected," he said.
Last month, the institute also closed its Whangarei branch, with the loss of four jobs, because of a decision to consolidate most kiwifruit research at a new facility at Te Puke.
Dr Warrington said a decision in the early 1990s to pull out of plant nutrition work, because the foundation thought the industry should fund such work itself, had proven unfortunate because plant nutritionists were now needed for research on organic growing techniques.
"Those who observed their colleagues losing their funding in that case have been very reluctant to go back to it," he said.
"This is one of the examples that has occurred because of this unmanaged change. Sooner or later you realise that you do in fact need the skills that only a short period of time earlier you determined that you didn't need."
