Dairying fuels Ngai Tahu's $1.5b drive

ALAN WOOD
Last updated 05:00 02/04/2014

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Over the next 15 years Ngai Tahu expects to build the value of its agricultural investment to more than $1.5 billion, helped by its conversion of forestry land into dairy farms.

Ngai Tahu Property chief executive Tony Sewell said the $1.5b target would be backed by hundreds of millions of dollars of extra capital investment.

The iwi would invest $600 million in land conversion, stock and dairy company shares. The first tranche of that expenditure, to date and over the next five years, would be $150m, including the transformation of Eyrewell and Balmoral forest land to irrigated pasture.

Ngai Tahu has already started operating three pilot dairy farms north of the Waimakariri River, with three more in its sights. Expenditure would include 7000 cows and shares in Fonterra.

Sewell said it would make sense for Ngai Tahu to establish a board and separate management group to oversee the farms, but for the moment the operation remained under Ngai Tahu Property.

Ngai Tahu Holding Corp, the iwi's investment arm, also has tourism, seafood and capital subsidiaries, each with their own boards and management lines.

Sewell said Ngai Tahu Property's early farm investments included 36,000 hectares of high country property at Greenstone, Routeburn and Elfin Bay, near the head of Lake Wakatipu.

Eyrewell and Balmoral were recent additions.

Forestry Land held for farm development included 7000ha at Eyrewell 9000ha at Balmoral and about 10,000ha on the West Coast. Already about 30 per cent of the Balmoral land had been cleared.

It was a "fair job" ripping out the forestry and changing the land use but the iwi judged the cost of converting the land as "world class" and was becoming skilled at the management of water and nutrients, including any potential runoff, Sewell said.

Sewell said the iwi used lysimeters to measure nutrient leaching, and was helped by the fact the land was relatively flat so that runoff was less likely to go into waterways.

The iwi's Dairy Farm One has been a water-quality award winner at the regional Ballance Farm Environment Awards.

Different types of sheep, horticultural and beef farming would be examined, "[but] we have to be sustainable," Sewell said.

Federated Farmers environment spokesman Ian Mackenzie said while Ngai Tahu was doing relatively well on the environmental front, it was not a standout, as other farmers in Canterbury such as Mark Slee from Ealing were doing similar work.

"They're employing technologies that a lot of other farmers are already using . . . I think what they're doing is fantastic but there will be an [environmental] effect and Ngai Tahu can't pretend there won't be."

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Ngai Tahu had also reportedly been "unfriendly" towards other farmers over "similar" development plans, Mackenzie added.

Sewell also pointed to Ngai Tahu's water and irrigation strategy for the Canterbury farm land. A 5 per cent shareholding in Waimakariri Irrigation gave it access to water for the Eyrewell property.

The iwi was examining "cost effective" options for the Balmoral block. Ngai Tahu was a 30 per cent shareholder in the Hurunui Water Project, and was also looking at options around the Waiau River.

- BusinessDay

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