Red tape, lack of access barriers for aquaculture expansion - NZ King Salmon boss

Leaders in New Zealand's aquaculture sector say the industry's growth has been constrained by bureaucracy and a lack of access to the country's marine estate - as it works toward the government's goal of reaching $3 billion in annual sales in the next decade.

At the Aquaculture New Zealand conference in Nelson on Wednesday, NZ King Salmon chief executive Carl Carrington said the opportunity to grow the aquaculture industry was huge, with only 0.01 percent of New Zealand's 430 million hectare marine economic estate currently being farmed.

"As a nation, we have made it incredibly difficult to gain access to farm the sea."

He said the company's Blue Endeavour project to farm salmon in the Cook Strait was the poster child for this, having taken nine years and $9 million to get through the consenting process.

Carrington said the industry generated $760m revenue each year from the farming of mussel, salmon and oysters (three quarters of which was export earnings) which was "but a drop in the ocean of the potential".

"Salmon generates a return 16,000 times greater than sheep and beef per surface hectare.

"Unfortunately the salmon sector's production has moved diddly-squat in the last 10 years."

Blue Endeavour is expected to be a major contributor to the industry's $3b goal, where it's hoped 10,000 tonnes of salmon will be produced at the 12-hectare farm each year. It will be worth an estimated $350m in export earnings which would more than double the company's current production.

Its pilot farm, made up of two 55 metre diameter pens, is expected to be operational from mid-next year, with salmon to be harvested from 2030.

Dealing with bureaucracy and securing investment

Carrington said the government had taken steps to reduce regulatory hurdles and he presented Minister for Oceans and Fisheries Shane Jones with the NZ King Salmon "Commercial Thinking Belt" which was awarded to whoever showed "outstanding grit, ingenuity in cutting costs or creating value for our company".

He said the Minister's work spearheading the Resource Management (Extended Duration of Coastal Permits for Marine Farms) Amendment Bill, which was passed in August and granted New Zealand's 1200 marine farms another 20 years on their permits, had already saved the company close to $2m and avoided the diversion of significant resources and energy just to maintain its current rights to operate.

Jones said while the government was working to address the bureaucracy, reaching the $3b goal would require overseas investment in the industry, as it wasn't likely to come from the government in the short term in its current fiscal state.

"The government is backing large scale aquaculture, but where's the money going to come from?

"In areas such as mining, aquaculture, infrastructure we have to take a pragmatic view, find a win win situation and not beggar ourselves because we struggle to maintain access to suitable levels of capital to develop on these very large offshore salmon and fish farm opportunities."

He said if the country didn't consistently generate an economic surplus, New Zealand would become an impoverished nation.

Jones is travelling to Singapore later this month, where he said people were "keen as mustard" to work with Kiwi stakeholders and investors in food.

He said it also required finding the balance between environmental and development outcomes.

"This notion of deifying the environment, that if we change the environment somehow we are fatally wounding our identity, in my view that represents a philosophy of putting ourselves down.

"I think marine farming and the stewardship that you represent is a clear example of where we can have the best of both worlds."

A partnership for a $10 billion industry

Cawthron chief executive Volker Kuntzsch and Plant and Food chief executive Mark Piper spoke of the organisations' ambitious plan to grow the industry to $10b in the next decade.

Piper said it was possible, given the dairy industry had grown from $2b to $20b in 30 years, with less land than the aquaculture industry had ocean to work with.

But science organisations were incentivised to compete with each other for funding, instead of working collaboratively.

Kuntzsch said adding value in the industry wasn't just about farming across a larger space, or moving from commodities to niche markets, it was about what New Zealand could offer in terms of science and innovation.

"At Cawthron we have 280 scientists, technicians and support staff from over 30 different countries...world class specialists in anything from micro-algae ecology, to genetics and blue tech.

"We believe with the science that's being done here we can actually attract tremendous capital, also from overseas, in order to create more opportunities."

Kuntzsch said meeting the $10b goal was possible with an investment of $100m each year in aquaculture-related science and innovation, the equivalent of what Fonterra spent on research annually.

"It is not a a big number if you consider that the return of investment in the blue economy globally is at least five times the investment... we feel that within 10 years we can develop the $2.5b we are at now in the bio-based economy to $10b, through collaboration that spans science, industry, iwi, government and regional councils."

Nelson mayor Nick Smith said the aquaculture sector was vitally important to the region, which had just suffered its toughest winter in 20 years.

Nelson had been at the bottom of ASB's regional economic scoreboard for three quarters in a row and Smith said export-led growth was the only way out of the current economic doldrums.

"Never has it been as important for Nelson and New Zealand, that we grasp the opportunity that aquaculture represents as a growth prospect.

"We see the future of the city very much connected to this industry."

Smith said central and local government needed to get the regulatory environment right, be open to international investment, support the work of science institutions, engage with the environment sector, support infrastructure growth and the training sector in order to grow the industry.