Nelson summit considers Chinese markets

TRACY NEAL
Last updated 12:58 24/06/2014

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New Zealand exporters hoping to share a sliver of China's burgeoning buying power need to narrow their focus to find a way in, the head of Wakatu Incorporation's food and beverage division says.

Kono NZ chief executive Don Everitt told a packed room at the Nelson Regional Economic Development Agency economic summit last week that China was a difficult market to understand, mainly because of its vast geographic, cultural and language differences.

"There is no China - it's many things developed over thousands of years, so ‘going to China' is a concept you forget about. That's why we're going to Shanghai instead."

Kono was targeting China's largest city of 24 million people in the next stage of the horticulture, seafood and beverage division's growth journey, Everitt said.

It was now collaborating on a joint venture arrangement being set up to provide representation in Shanghai. Details were yet to emerge on the new, wholly-owned foreign enterprise, but Everitt told last week's summit it would help Kono and others to expand their commodity list into new markets. It would also help put Kono in touch with partners within NZ Inc - the organisation set up by the Ministry of Foreign Affairs and Trade to develop strategies for strengthening New Zealand's economic, political and security relationships overseas.

Kono is a Nelson-based associated business of Wakatu Incorporation, and was set up in 2011. Wakatu provided capital for Kono developments which then gave back dividends to its parent.

Kono employed 289 people, although that figure swelled to around 400 depending on seasonal needs. It has assets worth around $70 million and has seen growth in export sales to China from less than $500,000 in its early years to an expected $5.6m this year.

Everitt predicts the value in Kono export sales to increase to a potential $30m in the coming years.

It has orchards in Motueka, vineyards in Nelson and Marlborough, mussel farms in the Marlborough Sounds, a seafood processing factory in Blenheim and offices in Nelson, Blenheim and Motueka.

Kono also owned its own 40-tonne crayfish quota and exported mainly to Shanghai. Thailand was becoming a "very important market for our mussels", Everitt said.

However, it was considered a small player in the top of the South Island's seafood industry, earning just 10 per cent of the annual $293m generated by the industry which employed 2700 fulltime workers in this region. Kono turned over $15m annually in wine sales, mainly to the United States and Europe, but none to China, Everitt said.

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The company recently bought Marlborough fruit leather producer Annie's, after it went into voluntary receivership last September.

- Nelson

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