22 June 2006

A new, comprehensive market intelligence report into New Zealand ’s aquaculture sector highlights the many opportunities that exist for international partnerships and investment in this fast growing and dynamic sector.

Commissioned by the government agency Investment New Zealand, the report finds that, as an aquaculture location, New Zealand is in many senses unparalleled. Natural competitive advantages, in terms of water quality and productivity, are complemented by a talented research community and world leading production techniques.

New Zealand ’s aquaculture sector has grown steadily since the late 1980s – at an average annual rate of 11.7% by volume over the 20 years up to 2005. Most products are exported, with key markets being Japan , the United States , the European Union and Australia .

Despite the big expansion of aquaculture in New Zealand , the sector remains in the early stages of its development with exciting potential for profitable growth. The further development of high-value species and value-added products promises to be the future of aquaculture in New Zealand .

The New Zealand aquaculture industry predicts sales of NZ$568.5 million by 2010 and NZ$1.3 billion by 2024, largely exports.

Global demand for aquaculture products is rapidly rising. With wild fisheries’ production static because of declining stocks and a continuing shift toward sustainable fisheries, including aquaculture, New Zealand is well placed to meet this need.

The country’s geographical isolation – far removed from the intensive human activity that has polluted the waters of many of the world’s biggest aquaculture producing nations – gives it a head-start over aquaculture competitors who don’t enjoy the same absence of inorganic toxins and a largely pathogen-free aquatic environment.

The competitive advantage that New Zealand has in its quality water is maintained by robust water testing procedures, initiated and funded largely by the industry. This is supported by the New Zealand government through legislation designed to prevent harmful activities (aquaculture or otherwise) that compromise the marine environment. The global market demands safe, healthy seafood and the New Zealand aquaculture sector delivers this in abundance.

There are many successful ventures in the New Zealand aquaculture industry, which is currently dominated by Greenshell^TM mussels, salmon and pacific oysters.

These companies are supported by a very capable and diverse aquaculture research community, which is actively involved in driving the sector forward through commercial ventures and development partnerships.

Research entities are investing considerable resources into development of new species, with kingfish and sea sponges being the focus of recent efforts. Many of the production techniques developed in New Zealand are world leading and demonstrate a spirit of innovation that has helped shape the industry.

The knowledge base of these research entities reduces the risk associated with undertaking an aquaculture investment in New Zealand , and they welcome the opportunity to work with new investors.

Partnerships with existing New Zealand aquaculture industry participants offer a further means of entry into the sector. As New Zealand marine farmers seek to move further away from commodity-based markets to value-added products, opportunities emerge for food processors and marketers to engage with farmers to produce even higher value products.

The Maori people of New Zealand hold an important place in the aquaculture sector and there are also potential opportunities to develop partnerships with iwi (individual Maori tribes). Under New Zealand law, iwi are entitled to 20% of marine farm space approved since 1992 and 20% of all future approved marine farm space. It is likely that iwi will seek partnerships for the development of marine farm space and working capital required to operate these ventures.

To find out more about international partnership and investment opportunities in New Zealand ’s aquaculture sector contact the Food & Beverage Investment Manager.

FB@investmentnz.govt.nz

(64) 9 915 4232