10 Jun 2015

Little progress on added value to primary exports

8:02 am on 10 June 2015

The annual KPMG analysis of the primary sector out this morning says little progress has been made in realising value-added growth to this country's exports.

The accountancy firm's Agribusiness Agenda is a survey of more than 150 industry leaders.

The report said the annualised growth in the value of New Zealand's primary sector exports between 2002 and 2014 was 4.5 percent, mostly driven by commodity price movements and volume shifts.

KPMG's Head of Global Agribusiness Ian Proudfoot said there needed to be a change in the culture, because little had been done to add value.

He cited growing demand for other dairy products, not just powder.

"It's not just the protein and the fat in milk that is important to a customer, it is also the liquid.

"And the trouble is we have a large installed base of dryers and yet we have customers asking us more and more for liquids, so we maybe have got the wrong plant configuration for what the market is going to want in the future.

"So I hope I never hear about another major dryer project in New Zealand, I hope I hear about lots and lots of liquid projects and I think that sort of mindset needs to insure that we are being really active in thinking about what the future needs to look like."

Mr Proudfoot said the change could not happen overnight and producers needed to take a longer-term perspective.

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