New Zealand looks to PH, Southeast Asia for growth

For a number of Southeast Asians in search of greener pastures, New Zealand—the last place in the Pacific to be inhabited by mankind—is becoming a favored destination. One in every 50 Kiwi is of Southeast Asian origin and half of all Southeast Asian immigrants are from the Philippines.

With a vast territory and a population of only 4.5 million, New Zealand is happy to welcome skilled manpower. It’s one place where the standard of living is high and people don’t seem to mind skin color.

But more than just opening its door to migrants, this Pacific territory seeks to do more business with Southeast Asia, especially at this time that its main trading partners China and Australia are seeing slower growth. From the dairy farms that dot its scenic landscape to its aviation sector and booming tourism industry, Kiwi businesses have one clear message to Southeast Asia: “We want to do more business with you.”

In 2015, New Zealand celebrated its 40th year of diplomatic relations with the Association of Southeast Asian Nations (Asean), of which the Philippines is part. Incidentally, this was also the year when this 10-member bloc officially created a single market that makes it even more attractive to outbound-looking states such as New Zealand.

The Asean Economic Community (AEC) became a legal entity on Dec. 31, 2015.

As a unified economy, Asean is the world’s seventh largest with a combined gross domestic product of $2.4 trillion and could be fourth largest by 2050 if growth trends continue, based on Asian Development Bank estimates.

With over 600 million people, Asean is the world’s third most populous region next to China and India and is thus very attractive not just because of its vast consumer base but also its relatively young labor force.  The establishment of the Asean Free Trade Area (AFTA) and other free trade areas with six dialogue partners such as New Zealand (the others are Australia, China, India, Japan and Korea) had brought down tariffs and facilitated the free flow of goods and services.

“It’s a very important region for us historically,” New Zealand Prime Minister John Phillip Key told a group of Southeast Asian journalists who visited the Pacific nation last year.

Key afterwards visited several Southeast Asian nations including the Philippines—which hosted the Asia Pacific Economic Cooperation Summit Leaders’ Summit in November—to celebrate the 40-year milestone with the region.

Also, this 2016, the Philippines and New Zealand are celebrating 50 years of diplomatic relations.

Remote farmland

It was not so long ago when New Zealand was but the “remote farmland” of Great Britain.  Traditionally, the United Kingdom provided New Zealand with an almost guaranteed market for its produce.

This changed in 1973 when the UK joined the European Commission, the executive body of the European Union. New Zealand needed to find other markets quickly and Southeast Asia came into the picture.

Since establishing diplomatic ties with Asean 40 years ago, the region is now Zealand’s third largest trading partner.

New Zealand is known for its food and beverage exports.

The Philippines, which has a small dairy industry, is a big importer of dairy from New Zealand. It is one of the biggest markets in Asia of Fonterra, the world’s largest exporter of dairy products.   It is the multinational dairy firm behind locally-recognized milk brands such as Anlene, Anmum and Anchor.

Other new Kiwi players such as Miraka—which is controlled by the Maoris—New Zealand’s aboriginal people—is also seeking fresh opportunities in Southeast Asia.  Miraka operates in Mokai, 30 kilometers northwest of Taupo—in New Zealand’s central North Island.  It sources milk from a hundred local farms within an 85-kilometer radius, using a high-tech trucking system that ensures high quality of milk collection. New Zealand is also gaining popularity as a producer of olive oil and wine.

In Waiheke Island in the Hauraki Gulf of Auckland—which has a climate suitable for growing olives and grapes—is the Rangihoua Estate, the founder of which was inspired by an olive farm in Tuscany Italy.

All the olives are handpicked at the optimum level of ripeness, using small hand rakes to comb the olives off the tree. Within 24 hours from picking, the olives are pressed using olive oil presses imported from Italy.

Middle Earth

New Zealand’s picture-perfect green pastures are not just good for farming but for sightseeing, too.

With increasing connectivity, especially with flag carrier Philippine Airlines now flying direct to Auckland, it’s now easier for Filipinos to travel to this idyllic state.

One favorite destination among tourists, of course, is the Hobbiton Movie set, which is actually part of an operating sheep farm.

It was developed into “The Shire” of the Lord of the Rings (LOTR) trilogy fame.

Thirty-seven hobbit holes were created with untreated timber, ply and polystyrene in the farm owned by the Alexander family.

The set was rebuilt in 2011 for the feature films “The Hobbit: An Unexpected Journey”, The Hobbit: The Desolation of Smaug and The Hobbit: There and Back Again” and has since become a permanent attraction complete with hobbit holes, gardens, bridge, Mill and The Green Dragon Inn.

Thanks to Kiwi filmmaker Peter Jackson, the 500-hectare Alexander farm in Matamata, Waikato, has become an agriculture and tourism estate in one.  The Hobbiton is just one of the many LOTR shooting locations in New Zealand.

Apart from its great outdoors, New Zealand also offers tourists an exhilarating culinary experience.

Think of all the lamb, pork, venison, salmon, lobster, oysters, mussels, scallops and various shellfish that you can eat.

But tourism opportunities are seen as a two-way street.

The Philippines is seen well placed to attract more Kiwi visitors with its great beaches and other tropical offerings.

Aviation

Meanwhile, New Zealand’s rugged geography and location give aviation a position of vital importance to its economy. Over decades, the country has developed one of the world’s most efficient, profitable and innovative aviation systems, and its training environment for engineers, pilots, crew, air traffic control, and managers is renowned for producing quality personnel.

To date, aviation is a $10-billion industry in New Zealand, with about $3.25 billion worth of exports.  The industry manages about 30 million square kilometers of airspace and exports its expertise to about 80 countries.

Hamilton Airport general manager John Nicholson noted that New Zealand had quickly appreciated the potential of aviation.  The country’s first aviation exports started in 1912, first passenger flights in 1915 and established the first pilot school in 1916 and first airmail service in 1919.  The country has also pioneered the use of aviation in tourism, forestry, agriculture and horticulture.

Among the industry’s various international successes, Airways NZ has provided aviation consultancy and/or air traffic control training to East Timor, Hong Kong, Indonesia, the Philippines, Singapore and Vietnam while helicopter operator HNZ supplies offshore services to Shell in the Philippines.

Our Asean journalist group also visited CTC Aviation in New Zealand, a boarding school that trains airline pilots. This Pacific country is also a producer of aircraft.

Hamilton-based Pacific Aerospace (PAL)—Australia and New Zealand’s largest aircraft manufacturer—currently designs and manufactures utility aircraft for the global market.

Geothermal

New Zealand’s expertise in geothermal energy is also interesting for the Philippines.

Collaboration between New Zealand and Philippine specialists in the last 40 years has been instrumental in the exploration and development of several major fields that in turn helped make the Philippines a leading geothermal energy producer.

New Zealand’s leading provider of geoscience and isotope research, GNS Science, has an alliance with local geothermal giant Energy Development Corp. on geothermal energy exploration and development.

New Zealand Minister Steven Joyce, who handles economic development, Science and innovation, tertiary education, skills and employment departments, was in the country last year to witness the signing of a new memorandum of understanding (MoU) between GNS and EDC.

“GNS is a long-term geothermal science specialist and they have a very good pedigree in evaluating opportunities in the geothermal fields and the technology associated with that,” Joyce said in an interview.

Minister Joyce said this was a very good team-up between GNS and EDC, bringing in the former’s expertise in modeling geothermal reservoirs and assessment of existing fields.

“But also, the other part of it is GNS has a specialist research institute in Taupo-Wairakei (Research Centre) and they are looking to redevelop that and bring in private partners,” Joyce said, adding that EDC had indicated interest in this.

Wairakei Research Centre is a leading supplier of earth and nuclear scientific research and consultancy services in New Zealand.

Two-way street

For some Philippine conglomerates now looking for offshore expansion opportunities, New Zealand has beckoned as well.

In 2014,  Gokongwei-led Universal Robina Corp. acquired Auckland-based Griffin’s Foods Ltd., New Zealand’s leading biscuit and snack food manufacturer, for about NZ$700 million (P26.37 billion).

Griffin, which has two factories in Auckland, has a leading market share in biscuits (where it has a large portfolio of iconic brands), the second largest market share in salty snacks (ETA brand) and the leading share in wrapped snacks (Nice & Natural brand).

Founded by John Griffin in Nelson in 1864, Griffin’s has always had an iconic presence in New Zealand.

It also enjoys a growing branded presence in Australia. It currently sells its brands to more than 20 countries and URC intends to expand on these export opportunities.

URC, which has an extensive footprint in Southeast Asia, has now started to roll out Griffin’s products to the region.

Given these developments, one can conclude that the best of relations between New Zealand and the Philippines is yet to come.