Neighbourly nous needed at Ruakura
A Waikato innovation leader is romancing AgResearch with a view to a wedding at Ruakura, writes Andrea Fox.
AgResearch's Ruakura campus will get up close and personal with neighbour the Waikato Innovation Park in a dynamic, money-spinning innovation centre if Stuart Gordon has his way.
Gordon, chief executive of the innovation park and spinoff business developer FoodWaikato, says by bringing in AgResearch's cluster of research and development activities, some privately operated, there's a real opportunity to create a Waikato economic driver.
"What we have here, and what Ruakura has, is a centre of innovative companies and organisations mainly in the agritech, food and ICT (information and communication technologies) space - some fantastic companies. I'm trying to work out how we can bring private money in to grow it, and I've been talking to Tom Richardson (AgResearch chief executive) as to how we can bring AgResearch in on this," says Gordon, a former chief executive of LIC.
"That place is getting pretty rundown, maybe we can attract some private money there."
The innovation park, host to companies that last year collectively turned over $427 million and employed 562 people, is immediate neighbour to the 39-hectare AgResearch campus.
The jewel in the park's crown is New Zealand's first and only independent and open-access spray dryer capable of developing new food and beverage products from concept to commercialisation. The dryer is FoodWaikato's brand flagship and last year produced $53m of added-value export product for sheep and goat milk companies.
The six-year-old dryer, which produces half a tonne of powder an hour, was built by the innovation park to offer open-access to entrepreneurs. One of its first customers was the highly successful infant-formula exporter Dairy Goat Co-operative, which used it while it built markets and funding for construction of a second major dryer on its Hamilton site. More recent FoodWaikato customers have been New Image, makers of colostrum and goat milk infant powders, which has since built its own factory, Taupo sheep milk producer Maui Milk, Auckland's Spring Sheep Dairy and Blue River Dairies from Invercargill.
Access to the dryer means emerging exporters can build supply and markets before having to fund their own plants, says Gordon. "That changes the economics quite dramatically."
The main job of FoodWaikato and its dryer, he says, is to help build new businesses and their products. FoodWaikato is a partner in the New Zealand Food Innovation Network, launched by government agency Callaghan Innovation.
"We do research and development for most of the big players but our main area of business is in the sheep and goat industries. The vision is that in 10 years this is a half-billion-dollar added-value industry.
"None of our products sell for less than $20,000 per tonne, compared to $4000 for commodity wholemilk powder."
The dryer assets are valued at about $25m, but it has resulted in an investment of $135m by business developers and users, spawning sheep-milking farms, farming diversity and new farming production systems, says Gordon who's been in the job nearly four years.
The dryer is making a small profit and is fully self-funding, he says.
"We are contract manufacturers in a high-risk area working with new companies to develop new products. We are in a space where private enterprise doesn't want to be. New companies without financial backing are highly exposed. We have our own experience of two companies working here which have gone bust and not been able to pay their bills to us. But there have also been successes."
The idea for the dryer, which today employs 20 fulltimers, was AgResearch's about eight years ago, says Gordon. The innovation park picked it up and ran with it, with government regional development fund support. Today, Callaghan Innovation owns 30 per cent of FoodWaikato and the innovation park holds 70 per cent. The park in turn is 100 per cent owned by the Hamilton City Council.
Gordon's interest in luring AgResearch comes as he and the innovation park's board try to attract private investors to develop the park, which represents Callaghan Innovation and New Zealand Trade and Enterprise in the Waikato region.
"AgResearch was moving all its food sciences to Massey, but because the small-ruminant industry (dairy goats and sheep) and us are here, they've decided to retain some people. Landcorp is developing a new sheep-milk farm at Matamata and Maui Milk comes through our dryer. We've filled a gap and the bees come to the honeypot."
A master plan to expand the park's four buildings to 16 needs money the city council doesn't have so it resolved to allow outside investment. Gordon says the investor drive is continuing, but declines to give details.
The current buildings occupy about 3ha of the 12ha park site.
"We've produced a plan to develop something that creates collaboration and a great place to work. It can be built in stages around innovation and food, a properly-designed innovation centre that could be a driver of economic wealth for this region."
AgResearch has leased its campus site from Tainui Group Holdings since 1997. New Zealand's largest Crown Research Institute also farms 11ha of land surrounding the campus, and another 200ha of farmland under a separate lease with Tainui. The campus hosts AgResearch science groups including animal reproduction, environmental research, food assurance and meat quality and dairy foods research. The groups employ 233 people, including 164 science staff and 69 non-science staff. Some are scheduled to move to other cities.
AgResearch says it has a number of tenants which work with it, and independently, at Ruakura. Along with staff from Massey University, Ministry for Primary Industries, Ministry of Education and PGG Wrightson Seeds, on-site private tenants include Analytica, IVS, Synthase Biotech, Manuka Med and InterAg. The Chiefs super ruby team also uses part of the campus. AgResearch declined to discuss private tenant commercial rents and agreements.