Top Exporters Look Up The Value Chain

Top Exporters Look Up The Value Chain

26 July 2004 - An increasing trend towards added-value products and services, prevalent in this year’s Export Award winners, is heartening, says New Zealand Trade and Enterprise CEO Tim Gibson.

Mr Gibson said Solid Energy New Zealand, named the country’s top exporter of the year at the NZTE Export Awards in Auckland on 23 July, showcases successful strategies to add value and create long-term growth in the primary sector.

“New Zealanders in general have a tendency to define the value of something by the cost that went into its creation – rather than being what someone, somewhere is willing to pay for it.

“If New Zealand is to raise its standard of living and reclaim a place in the top half of the OECD’s richest nations the country has to lift its game, particularly when it comes to exports,” he says.

“We don’t only need more exporters; we need more profitable export businesses. One way we can achieve this is by shifting our traditional focus on commodity trade up the value chain.”

Mr Gibson said Solid Energy’s sustained export-led growth had been underpinned by product and market diversification. The company had increasingly optimised its coal resources by developing products for specific high-value markets, including the export of small parcels of high quality coals for specialist uses. Last year it earned a record $180 million in foreign exchange.

“Adding value to products and services is critical to New Zealand’s future economic success and a common theme of many of this year’s export award winners and finalists. It’s an encouraging trend.” Other winners also showcase clever global marketing and business practices. Among them is Palliser Estate Wines of Martinborough, New Zealand’s Food and Beverage Exporter of the Year, which is expert at brand development. Mr Gibson said this helped the small Wairarapa winery achieve a premium price for its wines in markets around the world.

“Through associations with other premium brands such as Versace, Audi and Bollinger, Palliser positions its product at the high end of the value chain.”

Producing high value products and services not only generates higher margins, it provides better differentiation of New Zealand products and services compared to our competitors.

“That provides greater security when there is a downturn in an export market because the high New Zealand dollar or a crisis such as SARs because consumers will buy differentiated products more readily than commodities,” Mr Gibson says.

The New Image Group, New Zealand’s Agritech, Life Sciences and Biotechnology exporter of the year, and Functional Nutraceuticals Ltd, a finalist in the category, both transform colostrum into high value health and dietary supplements.

The New Image Group has refocused over the past several years to make colostrum its flagship and expanded into the biotech market which included purchasing the rights to the world’s number one colostrum brand “Symbiotics” for Asia and Europe.

This gave New Image a significant strategic advantage with sales growing by 400% in two years and annual revenue now in excess of $14 million, mostly exports.

Functional Nutraceuticals Ltd invested in product development to secure its place in the colostrum product market. The company uses colostrum as a base component and enhances its properties with scientifically validated ingredients such as green tea to provide new products with ‘soft’ health claims. These products are called nutraceutical foods.

Tim Gibson says to succeed in an industry typified by commodity products and pricing regimes Jenkin Timber –the Wood Processing, Building and Interiors Exporter of the Year - has sought to create a positive point of difference between itself and competitors.

The Auckland company is a leading innovator, manufacturer and exporter of value-added finger-jointed and solid wood radiata pine products.

“Jenkin Timber focuses on reinvestment, customer service and adding value to base products – key attributes which make it a winner,” says Mr Gibson. “It has made the transition from being a straight commodity exporter to exporting value-added products and succeeded in a very competitive market.”

Endace Measurement Systems Ltd, a finalist in the Information and Communications Technology category, has established itself as the world’s leading supplier of computer network intelligence technology.

Tim Gibson said the strength of Endace’s intellectual property platform powers the company’s branding strategy, which helps position it in the marketplace as the premium solution provider.

ENDS

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