Food firm rescued from its post-quake woes

16:00, Nov 11 2012
Kisco Foods International Ltd produces veal stock and a white sauce for the Japanese market. Graham Kitson, left, and general manager, Tatsumi Hasegawa view the product.
BACK ONLINE: Kisco Foods International Ltd produces veal stock and a white sauce for the Japanese market. Graham Kitson, left, and general manager, Tatsumi Hasegawa view the product.

A Christchurch food ingredients firm has bounced back from receivership partly forced by the damaging September 4, 2010 earthquakes and is now involved in a venture with Lincoln University to develop new products.

The ingredients firm Hi Tech Foods was bought from receivers by listed Japanese firm Kuze Co, and became a subsidiary, Kisco Foods International Ltd, in May 2011.

The Japanese have since injected significant capital, allowing the firm not only to "reboot" but to go on and work with the university in food development projects, said Canterbury Development Corp chair Garth Carnaby.

Carnaby is backing the food ingredient development project, partly through the business facilitation role he holds with the university. He has the title of "entrepreneur in residence".

Carnaby said the joint work between the university and Kisco remained commercially sensitive in detail. But part of it was a "million-dollar" research project also supported by the Government.

Hi Tech Foods founder, Graham Kitson, said it was notable that the Japanese company made the investment in May 2011, just two months after the devastating February 22 Christchurch earthquake. The customer of Hi Tech had already invested about $500,000 in upgrading plant.


Staff had been retained and he had stayed on in an advisory capacity, Kitson said. Kisco had also brought two employees to the site in Vulcan Place in Middleton.

Kitson's company had first been set up in 1989 after he had worked and made contacts in Japan, and it gained traction into the mid-2000s with annual revenues growing to $10 million. Tougher times in the late 2000s and the 2010 earthquake led to business failure.

Kisco now owned the business assets of the food manufacturing operation, but Kitson kept ownership of the manufacturing site, he said.

The Christchurch firm manufactures high quality veal and other stocks as well as roux, a mixture of fat and flour which forms the foundation for white sauces. The manufactured roux was made for export for manufacturing and used in restaurants in Japan and Asia.

"The September quake meant we lost almost all of our [veal stock] business.

"A critical bit of equipment that was required for manufacture was lost . . . it was the time required to replace it that meant our customer had to go somewhere else," Kitson said.

This put financial pressure on and, with the high New Zealand dollar versus the yen, led to receivership.

The new owner Kuze group, was a publicly-listed food company in Japan with an aggregate annual turnover of about NZ$750m and supplied 12,000 customers, mainly in the food service area.

Kisco have also committed to a significant capital investment programme in upgrading and increasing production capabilities of the plant, Kitson said.

The collaboration with food scientists and engineers at Lincoln University and NZ Food Innovation South Island, signalled a determination by the Japanese owners to develop new food exports to meet the needs of Asian customers.

"It's a new food drying technique," he said.

Kisco also operates its own food manufacturing plant in Shimizu, Japan, with a focus on production of high quality soups, meat stocks, bechamel and other sauces. Kisco had originally outsourced a number of these lines from Hi Tech Foods, but now the group was relocating significant business from the Japan factory to Christchurch, Kitson added.

The Press