$38 million funding for greenhouse gas research

Allan BarberThe Pastoral Greenhouse Gas Research Consortium (PGgRc) has just announced that it has secured funding for a further seven years’ research into greenhouse gas (GHG) mitigation. $2.3 million per annum will be contributed by industry partners to be matched by the Ministry of Business, Innovation and Employment with the balance to come from AgResearch in its capacity as leader of the research project. Meat industry commentator Allan Barber has taken a look in his latest blog post.

The consortium has been in existence since 2002 and to date has spent about $45 million of 50/50 joint venture funding from industry and government. Its members are Fonterra, Beef & Lamb New Zealand, DairyNZ, AgResearch, Landcorp Farming, DEEResearch, PGG Wrightson Ltd and Fertiliser Association Joint Venture.

As its name indicates, the consortium’s sole focus since it started 11 years ago has been on finding ways to mitigate greenhouse gas emissions and during that period it has made some significant advances. It has developed knowledge specifically in sequencing the first rumen methanogen genome, developing a low emission sheep flock and finding feeds that can reduce methane emissions.

Mark Aspin, consortium manager, told me that a continuation of the funding will enable the programme to focus on five key areas of research:

  •  Refining  animal breeding tools for low emission livestock
  • Identifying more low greenhouse gas feeds
  • Identifying inhibitors that reduce ruminant emissions
  • Developing a vaccine to reduce ruminant emissions
  • Understanding the productivity effects and enhancing the adoption of mitigations.

The refreshed research programme, while recognising the long term commitment required, will be strongly focused on delivery of mitigation solutions, developed through an increased partnership between the consortium and the New Zealand Agricultural Research Centre (NZAGRC). Both of these organisations will coordinate their operations to ensure rapid delivery of effective options for farmers.

While New Zealand’s greenhouse gas emissions would constitute a significant proportion of our obligations under any future commitment to reduce emissions, political points scoring tends to obscure why it is so critical to get it right. Our economy and our agricultural sector in particular both depend on deciding on the correct entry point which is, I suspect, why the present Government has been so reluctant to commit itself.

Agriculture contributes 46 percent of New Zealand’s greenhouse gas emissions, a proportion no other country comes even remotely close to producing. Ireland with 27 percent is the closest and all other first world economies are in single figures.

The PGgRc has set itself an ambitious goal, stating in its press release “The new work aims to develop a suite of ready-made tools that will reduce greenhouse gases by 30 per cent by 2030 while supporting the agricultural industry’s growth targets of two per cent each year.” The benchmark year is 2008 when I understand emissions were at 1990 levels. As Aspin said “it’s a big challenge, but we think we can get there.”

I suspect the Green party won’t be satisfied with this progress, because anything short of total commitment to eliminating greenhouse gases is unacceptable, whatever it costs the country. But it is a very solid programme of work backed by science and industry and public money which has some challenging, but achievable goals.

The best thing about it is that it won’t send agriculture and the country into a state of bankruptcy, but it should produce some real improvements in our GHG emissions.

Allan Barber is a meat industry commentator and has his own blog Barber’s Meaty Issues. This item has also appeared at www.interest.co.nz.

 

Callaghan Innovation opens

callaghan-logoExciting times for future innovations in the New Zealand meat industry. Callaghan Innovation, New Zealand’s new innovation organisation – named after the late Sir Paul Callaghan – opened and was officially launched last Friday in Auckland and Wellington.

The new organisation will accelerate the commercialisation of New Zealand innovation, according to Science and Innovation Minister Steven Joyce.

“Callaghan Innovation will be a one-stop shop for business innovation support, whether it be in science, engineering, design or technology. It will be a high-tech HQ for New Zealand businesses,” he says.

Callaghan Innovation brings together the former crown research institute IRL, the Ministry of Business, Innovation and Employment (MBIE)’s business investments team, the Auckland Foodbowl and NZ Trade & Enterprise’s Lean Manufacturing programme. It will commence operations with 400 staff and offices in Auckland, Wellington and Christchurch.

The organisation will work across industries as diverse as food and beverage manufacturing, agri-tech, digital technologies, health technologies, therapeutics and high value wood products.

“The common theme is encouraging innovation and higher value products and services,” says Joyce.

The organisation is being led initially by acting chief executive Murray Nash. Over the coming months, the new Board of directors, chaired by Sue Suckling, will complete the appointment of a permanent chief executive and oversee the bedding in of the organisation’s operations in Auckland, Wellington and Canterbury. Other board members includer former Game Industry Board chief executive Richard Janes, currently an IRL board member, Auckland Transport director Paul Lockey and Dr Michele Alan. They are joined by new board members Robin Hapi, Professor Peter Hunter from Auckland University,Sir Peter Maire and Craig Richardson.

The news has been welcomed by an array of science leaders for its expected ability to boost private sector innovation.

Professor Shaun Hendy, President of the New Zealand Association of Scientists, commented that he thinks Callaghan Innovation will have to do two things to succeed.

“Firstly it must develop the science and technology that New Zealand’s manufacturing sector will need in the decades to come. As Sir Paul Callaghan pointed out in his book, Wool to Weta, New Zealand has not put enough effort into the science that underpins high-value manufacturing.Callaghan Innovation represents a great opportunity to close the knowledge gap between New Zealand and the other advanced economies.

“Secondly, the organisation needs to develop effective new ways of bringing together researchers, entrepreneurs and businesses. New Zealand doesn’t enjoy the benefits of agglomeration that Sydney or Tokyo do, so Callaghan Innovation will need to find scalable, smarter ways to make these connections. This will largely involve making better use of the information we already have about the innovation sector in New Zealand.

“We will be able to tell if Callaghan Innovation is on track in a year or two by whether it has been able to significantly grow the numbers of scientists and decrease the number of bureaucrats that work there,” says Hendy.

Callaghan Innovation is a key part of the Government;’s Business Growth Agenda and received funding in Budget 2012 of $166 million over four years.

 

 

 

Pet food and jerky emerging as export growth opportunities

Pet food and prepared/processed beef products like beef jerky, or biltong, are two emerging growth opportunities for the New Zealand meat industry that have been identified in a newly released Coriolis report An Investor’s Guide to Emerging Growth Opportunities in New Zealand Food and Beverage Exports.

Strategic management consultants Coriolis carried out the report on behalf of the Ministry for Business, Innovation and Employment (MBIE) to identify emerging high potential food and beverage export categories.

The report filtered out various export categories over $100 million each, such as boneless frozen and chilled lamb, bone-in sheepmeat, boneless and bone-in frozen and chilled beef, meat and edible offal (including venison), fats of beef, sheep or goats, as they “represent New Zealand’s core food and beverage exports” and also categories under $2 million. This left a core 129 categories for analysis.

Pet food and jerky were two of the initial 25 categories short-listed for their emerging export growth potential. Two more meat industry related categories – protein concentrates and textured protein substances and sausages – just missed the initial cut, with frozen chicken cuts also being dropped out of the final 20 as it had low potential export growth.

Pet food has a large global market, strongly growing demand and opportunities for growth in Asia, especially China, Australia and other rich countries, the analysis shows alongside information showing the category is capital intensive, requires some skills and has moderate trade access. Pet food has already attracted investment from US-owned Watties and Mars NZ and Swiss-owned Nestle NZ. Currently, exports are worth US$169 million, out of a global market worth US$13.8 billion, but the “possible size of the prize” by 2025 could be in excess of US$500 million, says Coriolis.

Beef jerky has received inward investment from US company Jack Link’s, which has grown the category markedly in recent years. New Zealand’s exports of processed/preserved beef are currently worth US$83 million, out of a global market worth US$7.4 billion, but he potential prize lies between $100-200 million for the category to 2025, says Coriolis. Opportunities lie in Asia, but making jerky is a capital intensive process that requires skills.. The UK is seen to have potential for the product

Report: a “vital resource”

New Zealand Food and Grocery Council chief executive Katherine Rich says the report is a vital resource for anyone in the food industry or someone looking to invest in it. This is the first time this information has been collected in such as easy-to-reference format.

“The food industry is the backbone of the economy and is always looking for investment to grow export opportunities. It is important that this additional investment is attracted so new Zealand can take advantage of the significant growth opportunities presenting themselves, particularly in Asia as the middle class there grows,” she says.

“It is perhaps not surprising that the sectors identified by the report as showing the greatest potential to grab these opportunities are ones where New Zealand could have a competitive advantage: salmon, honey, spirits, biscuits, pet food, cherries and infant formula,” says Rich, adding that there are other areas too, including beef jerky.

“As the report identifies, our exports of these top categories in 2010 were greater than the wine industry ($1.03 billion as against $951 million) and most of them are growing faster than all other food and beverage exports. Some 17 of them have already attracted foreign and/or private equity investment, indicating that the market itself has identified they present strong opportunities for growth.”

The categories of processed goods are already having an impact. “But what is most exciting is that Coriolis predicts that if they all acheived their potential we would be looking at exports worth between $4.3 billion and $6.1 billion – approximately $4.9 billion additional.”

To achieve the Government’s goal of increasing exports by 40 percent by 2025, each of these categories needs to continue to grow, says Rich. “This MBIE report will play a critical role in informing this plan.”

An Investor’s Guide to Emerging Growth Opportunities in New Zealand Food and Beverage Exports can be read online at the www.foodandbeverage.govt.nz website, where you can also download a pdf copy.

 

Smol confirmed as permanent MBIE head

David Smol has been appointed as the first chief executive of the new Ministry of Business, Innovation and Employment (MBIE), it has been announced by the State Services Commissioner Iain Rennie.

Smol (pictured right) has been acting chief executive of the super ministry since April this year and prior to that he was the chief executive of the former Ministry of Economic Development. His new contract runs until June 2017.

The Government established MBIE on 1 July 2012, bringing together all the existing functions of the former Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing.

The Commissioner says that Smol has the skills and experience to “step up” to successfully lead the transformational change required in MBIE.

Smol will lead approximately 3,500 staff located in offices throughout New Zealand and overseas. MBIE has an annual expenditure of around $660 million and administers non-departmental appropriations of $4 billion.