NZ’s way to Asia through agritech
New Zealand agritech firms could find huge opportunities in Asia. Tao Lin reports.
New Zealand agritech has huge opportunities in Asia but companies could be doing much more to take advantage.
According to New Zealand Trade and Enterprise (NZTE), New Zealand exported $1.2 billion worth of agritech in 2013 in everything from genetics to pumping and irrigation.
Auckland business advisor Kenneth Leong says New Zealand agritech companies have no choice but to turn to Asia.
‘‘When we look at the world today, where are we seeing growth, both in terms of population growth as well as economic growth?’’
In Asia, particularly east and South-East Asia, New Zealand is synonymous with agricultural innovation and quality produce so companies here have a distinct edge.
Leon says agritech companies could be much more but there is a problem with scale as many New Zealand agritech companies are small, so they may need to work together to be more effective.
Developing relationships with Asian partners or getting investment from Asian companies could also help Kiwi firms hamstrung by lack of funding or market limitations.
Lincoln Agritech is currently setting up a distribution agreement for its irrigation product, Irricad, in China and it has also provided the irrigation system for the new Disneyland park in Shanghai.
Chief executive Peter Barrowclough says there is some dilemma about exporting technology and giving away New Zealand’s advantage.
But he says Kiwi companies need to think broader in terms of the export value for New Zealand.
‘‘Food security in China and other parts of Asia is a really important issue. While we as a country want to export our own good quality food products, we couldn’t possibly satisfy all that demand. Some agritech used in this country could help ensure the food consumers in cities eat is safe.’’
NZTE Beachheads programme adviser Anne Lochoff is based in Singapore and says there are huge opportunities for Kiwi companies in Asia, especially in feeding cities that can’t rely on rural agriculture systems.
The growth of mega-cities (a city of more than 10 million people), some of the largest of which are in Asia, means feeding vast urban populations is becoming increasingly crucial.
‘‘Once you have this kind of number of people in a city, feeding that amount of people is going to be a real struggle and we need to think about solutions of getting food to not have to travel too far to get into these cities,’’ Lochoff says.
The reality of doing business in Asia is more complicated than many think and one of the biggest mistakes firms make is misunderstanding the region.
Asian countries - even different cities - will have their own quirks and personality.
The volume will also be larger; for example, one city in Vietnam could produce the same demand as the whole of New Zealand.
Finding the right distributors, rethinking the business model and building longstanding relationships are also key.
‘‘It seems a cliche but you just don’t know what you don’t know. Getting the right information and thinking through strategy from the beginning is crucial,’’ Lochoff says.