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Primary sector strategySummary

Grow Wellington is the economic development agency for the Wellington region.

The primary sector makes a signifi cant contribution to the region’s economy, and we work with the sector to build scale and develop the capability of businesses within it.

This document outlines the characteristics of the sector in the region and details Grow Wellington’s strategic approach and activities.

A number of national bodies (such as Beef & Lamb NZ) representing primary subsectors have strategies in place to improve performance. These are largely production-focussed. Grow Wellington’s strategy complements these by focusing on issues specifi c to the region and on improving profi tability and

increasing market connections for primary producers across the region.

Our vision is for Wellington to have a sustainable, profi table, market-driven primary sector, where new innovations are tested and commercialised, and investment boosts economic value.

We invite regional producers, iwi, and interested organisations to work with us to achieve this vision.

Our strategic approach to the region’s primary sector focuses on three key areas:

• developing value from market connections

• fostering alliances and collaboration

• delivery of optimum production capacity.

MARKET CONNECTION

Encourage market led growth

Investigate and connect with new market

opportunities

Support and profile development of economic assets

Investigate land usedevelopment opportunities

Identify and developinvestment opportunities

Develop regional reputationand brand value

Identify niche productopportunities

Build collective strength for growth

Optimise infrastructure and land assets

ALLIANCES AND COLLABORATION

PRODUCTIONCAPACITY

Map and developvalue chains

Facilitate producer clusterssupporting growth

Foster Māori/iwi engagementto deliver growth

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The Wellington region primary sector

The primary sector is New Zealand’s largest source of exports and is a key area of focus for government policy, which has ambitious targets to double the value of primary sector related exports by 2025.

Wellington’s primary sector contributed $496 million to regional GDP in 2013 and directly employed 4,526 people in 2,459 businesses. The region produces 3.3% of New Zealand’s primary output. The fi gures

are considerably higher if processing is counted, for example regional meat exports totalled $378m, and timber product exports $122m in 2013.

Sheep and beef farming, forestry, wine growing and olives are among the most important industries in the primary sector. The region’s sheep numbers make up 5% of New Zealand’s fl ock and the area planted in olives is almost 10% of New Zealand’s total.

Primary productsManufactured goodsOther

Public administration and safety

Professional, scientifi c and technical services

Financial and insurance services

Other services

Manufacturing

Retail and wholesale trade

Information media and telecommunications

Health care and social assistance

Rental, hiring and real estate services

Construction

Education and training

Electricity, gas, water and waste services

Transport, postal and warehousing

Primary

The Wellington Region’s Economy

Value of New Zealand’s exports

Sour

ce S

tati

stic

s N

Z 20

14

Source Statistics NZ 2012

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Wellington

Kapiti

Upper Hutt

Wairarapa

Lower Hutt

Porirua

The Wellington region’s primary sector

The primary sector in the Wellington region is concentrated in the northern parts of the region on either side of the Tararua Ranges in Wairarapa and Kāpiti.

Livestock farming, forestry and horticulture (including grapes) make up the bulk of primary production in the region.

Beef farming Cheese making Dairy farming Forestry Honey production

Olive growing

Beehives Crab harvesting Export port Fruit & vegetable crop growing Meat processing Sheep farming

Cafés & restaurants Cray fi shing Fishing Grape growing

& wine making Native forest park Wood processing

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The Wellington region’s primary sector

The region’s primary producers are an important part of Wellington’s export profi le as they are well connected to the rest of the region’s economy. Primary production provides input into sectors such as manufacturing and tourism and contributes to the region’s reputation as the Culinary Capital of New Zealand through the provision of fresh quality produce to the region’s restaurants.

Market value Increasing

Forestry

Sheep

The primary sector’s contribution to the Wellington region’s economy is enhanced by processing and export operations.

Wine

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The Wellington region

MARKET

The Wellington region has a growing reputation as the cuisine capital of New Zealand, helped by annual events such as Visa Wellington on a Plate and Toast Martinborough, both of which also support our tourism and hospitality industries.

Wellington has a strong ICT sector that the region’s primary producers can work with to become early adopters of advanced technology.

Wellington exporters have the opportunity to take advantage of New Zealand’s excellent reputation for food production.

Wines from Wairarapa have developed an international reputation for quality.

The wine industry has an end-to-end value chain within the region which new models can be based on.

National bodies for most sub-sectors are based in the region to be close to central government decision makers.

The forestry industry is a signifi cant contributor to the region’s economy, particularly to employment in Wairarapa. Along with 60,000 hectares of forest there are a number of processing facilities and supporting operations such as transport and distribution. This provides economies of scale and opportunities for sustainable growth.

INFRASTRUCTURE

The deep water port located in Wellington harbour is easily accessible for regional producers exporting their products.

Wellington is a hub for distribution for central New Zealand.

There are strong transport links to Auckland, our largest domestic consumer market, with competitive transport costs.

COLLABORATION

Producers are willing to contribute to collective bodies for production-focused activity (but are not always used to working together to focus on markets).

The region’s iwi want to develop and grow land-based assets.

INNOVATION

The region is a hub of national technology innovation and is well placed to serve as a test market. Producers can reap the commercial rewards from being early adopters of innovation.

MARKET

The majority of the urban population in the region is not as well connected to rural producers, compared with Canterbury and Auckland, where rural land is more visible to urban dwellers.

The small size of industries can mean limited access to commercial opportunities.

INFRASTRUCTURE

Water and electricity infrastructure may not cater for increased growth. There is limited water available for irrigation in the region, which restricts the productivity of some primary producers. If irrigation increases, so will demand for electricity to pump water. Current electricity infrastructure may not be suffi cient to meet demand.

The limitations of roading and rail links mean there is restricted access to the port.

A number of distribution centres have moved out of the region to Palmerston North or Auckland and this may cause producers/processors to relocate as well.

PRODUCTION

A growing urban population could limit land available for expanded production if it encroaches on productive rural land.

Subdivision into uneconomic parcels of land impacts on productivity and future potential for the sector as small blocks do not allow for commercial scale production.

Some producers are not driven by commercial imperatives and therefore are not driven to scale their business (e.g. lifestyle block owners).

A signifi cant proportion of primary food processing takes place outside the region, reducing the value of economic activity to the region.

Strengths Weaknesses/threats

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Where could we go?Opportunities

There are a number of opportunities for the primary sector in the region that could improve economic sustainability.

Food (agriculture, horticulture, viticulture)

There is potential to improve productivity of the land, for example, through facilitating the provision of reliable water in the Wairarapa valley.

Connecting Māori land owners to market opportunities could lead to more profi table use of currently under-utilised land.

Developing end-to-end value chains for key industries could create additional economic value. There may be new market niches that the region could supply, for example hops for the craft brewing industry.

Developing innovations in processing operations may lead to the creation of new, higher value product lines providing higher returns for producers. For example, meat processor Taylor Preston established a separate business, Taylored Foods, to add value to the processed meat by creating diff erent cuts/new products that achieve a higher price in export markets.

The creation of a regional brand or quality reputation for food products may lead to more interest and better sales of regional products. Buy local campaigns could increase regional use of local products.

Collective market entry into markets of close proximity (such as Auckland, Australia and the Pacifi c Islands) could support the growth of small scale producers.

Collaboration beyond the farm gate. For example, producers and processors sharing supply chain logistics such as transport and warehousing.

Implementation of new technology is also key to increasing production capacity. Wellington has a strong ICT sector that the region’s producers can work with to become early adopters of advanced technology.

Forestry

Forestry processing in the region could be extended to include raw material from outside the region.

Improved road and rail infrastructure could lead to increased effi ciency and profi tability, and consequently increase the likelihood of continued investment into manufacturing operations in the region.

Increased investment in value-added processing beyond sawmilling could retain value in the region. For example, the investment by Juken NZ in the ‘J-range’ of engineered timber products, stronger alternatives to solid wood for the building industry.

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Activities

MARKET CONNECTION

Encourage market led growth

Grow Wellington’s programme of work in the primary sector is focused on three key areas. We enable growth across each area by connecting primary producers with the region’s innovative technology sector.

We connect primary producers to market opportunities to deliver growth, profi tability and economic sustainability.

Example - the Visa Wellington on a Plate Supplier Showcase provides producers with an opportunity to showcase their products to out of region retail buyers and local restaurateurs.

We help to build our reputation as a region of primary producers delivering quality products to market.

Example - the proposed formation of a Wagyu Producers Group, to develop a collective regional brand for Wagyu beef.

We support producers to develop niche market opportunities creating value from new product off erings.

ALLIANCES AND COLLABORATION

Build collective strengthto advance growth

We work with groups of primary producers and individual businesses to map their value chains and identify areas where new value and effi ciency can be realised.

We act as a neutral broker to assist producer clusters to collectively develop competitiveness and scale.

Example - the Southern North Island Wood Council, a collective of timber producers.

We foster relationships with iwi and other Māori organisations that will have the potential to deliver industry and business growth, and to deliver economic and social benefi ts to Māori.

Example - facilitating connections between Te Tumu Paeroa, which manages Māori land on behalf of individual owners, and primary producers in the Kāpiti region seeking to increase capacity.

We support development of key economic infrastructure, in recognition of its role in enabling the primary sector. This includes the Wairarapa Water Use Project, which is intended to increase the productivity of land and stimulate new opportunities for land use and investment.

Where there are barriers to growth, we advocate for regulatory reform and investment to upgrade assets (e.g. regional roading, shipping and rail links) and digital transformation in the primary sector.

We collaborate with relevant stakeholders, and iwi, to identify possible new land uses and processes that could create new jobs and greater economic benefi t.

We introduce key organisations, stakeholder groups, and iwi, to current and potential capital investment opportunities that are key to enabling growth.

PRODUCTION CAPACITY

Optimise infrastructure and land assets

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Through implementing this strategy we aim to achieve the following outcomes for the region’s primary sector:

• increased profi tability of producers

• increased processing and productivity in the region to create jobs

• infrastructure that enables industry growth

• a reputation as a region of quality food producers.

Our goals

To achieve our goals for the Wellington region, we need your help. If you would like to be involved in these activities please contact us.

Disclaimer: The information in this document and any attachments does not constitute professional advice and we are not liable if you act on it. Please seek independent advice before acting on any such information. The information is correct to our knowledge at the time of publishing, March 2015.

Get in touch

Contact Geoff CoppsPhone +64 6 370 3290Email geoff .copps@growwellington.co.nz Web www.growwellington.co.nz

Level 5, 50 Manners Street, Wellington 6011PO Box 10-347, Wellington 6143, New Zealand