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Address to the Saudi Ministry of Agriculture

Hon Nathan Guy
Minister for Primary Industries

5 March 2014

Speech notes for address to the Saudi Ministry of Agriculture

Good afternoon everyone. It is a pleasure to be here in Riyadh this week, as part of a week-long visit to Saudi Arabia, the United Arab Emirates and Oman.

Last year the Government launched the NZ Inc Gulf Cooperation Council (GCC) Strategy, which outlines New Zealand’s plans for further developing strong government and private sector relationships with the GCC.

The three key goals of this five year strategy are to build strong and enduring political relationships with the GCC; expand trade and economic relationships with region; and enhance our connectivity with the region.

Although we have been engaging with the Gulf States over many years, this Strategy puts us at the starting point of a deeper, more complementary relationship.

My visit this week, and similar visits of my ministerial colleagues, most recently Foreign Affairs Minister Murray McCully in January, is a key part of this strategy.

These visits are an opportunity to build on already well-established relationships with key agricultural and food export markets for New Zealand.

New Zealand’s trade with the GCC is strong – in 2013 our total two-way trade was $4.82 billion ($1.42 billion in exports; 3.39 billion in imports) - but there is potential to improve this.

While New Zealand has been exporting food and beverage products to this region for more than 30 years, this part of the world is still new to many of our food and beverage (F&B) and agribusiness companies, and the opportunities here are significant.

The New Zealand dairy industry has had a presence in this part of the world for nearly 40 years.

Earlier this week I had the pleasure of opening a new Fonterra distribution warehouse in the United Arab Emirates (UAE). This new and significant investment recognises the significant growth opportunities in the region and will allow Fonterra to hub into the Middle East, Africa and Central Asia.

Food security is high on the agendas of the GCC members. The scarcity of water and arable land (on average less than 1.5% of the land mass of GCC countries), growing populations, rising food demand, and vast imports, have led to attempts to solve food security vulnerabilities by looking for partnership and investment opportunities with other countries.

In this regard New Zealand, as a world leading agricultural producer, is a natural partner for the GCC.

Our background and long history of agriculture production and technology has the potential to contribute to the food security solutions of the GCC countries.

New Zealand has developed world-leading farm practices and approaches to fisheries management, advanced food technologies, among the strongest food brands, and a reputation for outstanding quality.

It is for this reason that the New Zealand Government has committed $6 million to establish an agribusiness service hub here in Saudi Arabia.

I visited the site for the agribusiness service hub and demonstration farm in Dammam yesterday.

Once completed this will be the first of its kind for New Zealand. This farm development of these sandy plains is impressive. It will comprise 15 centre pivot irrigators, a feed mill, a sheep breeding operation, a lamb and cattle finishing feedlot, and processing facility.

The demonstration farm will also be a model for vertical integration, from cropping to fresh meat supply to the local market. It will be a full showcase of New Zealand agritech including technical services, farming systems, animal health, on-farm equipment, genetics and farm expertise. New Zealand will also provide a genetics programme which will include animals for breeding.

The scale of this farm, and the potential for New Zealand, is significant. A broad range of New Zealand agribusiness companies are expected to be involved in the demonstration farm and it is hoped that the first services will be installed in Damman by mid-2014.

In addition to being a substantial investment and project in its own right, it is also expected that this demonstration farm will create other opportunities for New Zealand in this market, fast track partnerships between New Zealand and GCC businesses, and quite possibly open up significant opportunities for New Zealand companies elsewhere in the Arab world. I envisage that this will also provide a much stronger market presence for the export of chilled lamb from New Zealand to Saudi Arabia.

Following on from the visit to Dammam yesterday, where I also visited Saudi New Zealand Milk Products (SNZMP) a wholly owned Fonterra production site producing five different product types and exporting to 30 countries across the region, earlier today I signed a protocol with the Ministry of Agriculture in Saudi Arabia providing the framework for exports of livestock for breeding purposes.

Saudi Arabia is New Zealand’s largest trading partner in the Gulf Cooperation Council (GCC), and this arrangement seeks to strengthen the relationship between our two countries.

The protocol will regulate the export of live sheep, goats and cattle from New Zealand to Saudi Arabia for breeding purposes. It covers animal welfare requirements relating to either sea or air freight, and contains a guarantee that the animals will be allowed to disembark upon reaching their destination.

While New Zealand ceased exporting live sheep for slaughter in 2003, the export of livestock for breeding purposes has continued to grow with cattle, sheep and horses all shipped or air freighted every year. New Zealand has agreed livestock import health conditions with dozens of countries. Dairy cows are mainly sea freighted to China where just over 35,000 were exported in 2013. Sheep exports for breeding averaged around 400 a year and nearly 3,000 race horses are air freighted annually.

Following this signing, it is expected that the first research breeding flock of sheep from New Zealand will be air freighted before Christmas in order to commence the new Saudi hub operation. The protocol signed today is a key part of ensuring the success of the agribusiness hub in Dammam, and cementing in our future relationship with Saudi Arabia.

My inaugural visit to the Gulf this week has given me huge insight into the Arab world, and the desire for GCC countries to build relationships with New Zealand.

I look forward to seeing New Zealand become a partner of choice for the region.


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