24 October 2014
It’s the fatal flaw of our so called “rock star” economy; we still don’t add enough value to what we export.
The recent slump in dairy prices has re-exposed the weakness, casting fresh doubt on the government’s target of lifting exports to 40 per cent of GDP by 2025.
It’s in the mid-market – which comprises businesses of $2 million-$50 million turnover – where the big shifts will need to happen. According to GE Capital’s 2014 mid-market report, 98 per cent of the growth of agriculture, forestry and fishing turnover between 2010-2012 was driven by mid-market activity.
So can these mid-market businesses do an even better job of turning raw product into something more valuable?
Noke Ltd is a mid-market business highly focused on adding value; the process is about turning organic waste from pulp and paper mills, food processing industries and community sources into high quality soil conditioners – pure earthworm casting.
The central North Island-based bio-recycling operator takes matter ordinarily destined for landfill and puts it through one of four Noke wormfarms, where it is transformed into “vermicast” earthworm compost for farms and nurseries. Benefits include increasing humus content in soil, which helps to boost productivity while reducing nutrient losses.
Noke’s founder is soil scientist Michael Quintern, a former technical manager of the New Zealand Land Treatment Collective at Scion, the forestry Crown Research Institute.
Quintern stresses that there is a twofold payoff to Noke’s “upcycling” operation. Nearly 150,000 tonnes of organic waste annually is saved from landfill, he notes, while the compost produced is improving soil quality and productivity.
“We’re adding value to the primary sector, the farmers and growers, as well as helping the processing industries to become more sustainable.”
Bay of Plenty forestry outfit KFL is another mid-market company prospering by taking up the added-value challenge. Founded in 1970 by Tapio Kajavala, KFL was a conventional logging company for 25 years, one of 100 just like it around the country. However when Tapio’s son, Jacob Kajavala, took the helm in the late 90s, he began differentiating the company using new technology.
The first step was to incorporate a computerised log optimisation prototype to replace the age-old method of eyeballs and instinct. Next, a management system was developed to track the movement of logs through the central processing yard. Over time, KFL evolved from a logger to a logistics company, offering forestry companies services aimed at extracting maximum value from a harvest.
“They send us whole tree stems and that’s when our specialty comes into play. We squeeze every last cent,” says Kajavala, who estimates KFL handles five per cent of New Zealand’s forest output. “We also have operations in sawmills where we take care of their yards and log movements. And we do post-harvest operations in the forests; we do another ‘take’ and get all the waste that is merchandisable.”
Even the offcuts are processed as boiler fuel: “Nothing gets wasted.”
Source: NZ Herald