Salmon Company Expansion

26 April, 2012

Salmon Company Expansion
Significant long term growth expected

By the mid-2020s more than 1,600 additional jobs will be sustained in the Nelson Marlborough region if plans by salmon farmer New Zealand King Salmon come to fruition.

A report submitted with the company’s application to the Environmental Protection Authority also estimates the proposed expansion will generate an additional $119m of value added commercial activity in the regional economy.

NZ King Salmon is the country’s largest salmon producer and currently operates five farms in the Sounds. It has applied to the Environmental Protection Authority for permission to add another eight and convert a ninth from mussel farming, more than doubling its existing salmon production.

The figures assume salmon production levels anticipated by the expansion are achieved.

Nationally, the company is expected to sustain $178 million[1] of total value added annually in the New Zealand economy by 2016 and $1941 million every year from 2021. The expanded salmon production and processing, and associated flow on activities, will sustain an additional 1,510 jobs in total by 2016 and more than 1,600 by 2021.

By comparison, in 2010 the company’s activities contributed some $71 million in total value added in the New Zealand economy, sustaining 1,050 jobs in total including current staff of more than 450.

The report[2] was commissioned by the company and prepared in 2011 by Auckland consultancy Market Economics Ltd (M.E.) and takes into account the New Zealand King Salmon farming and processing operations themselves as well as their flow-on effects through the economy.

According to Dr Douglas Fairgray, principal author of the M.E study, the effects on the economy in terms of value added (broadly equivalent to GDP) and additional employment are estimated from the point of view of two key drivers.

“We have taken into account the extra farmed output and processing activity by New Zealand King Salmon itself as well as the subsequent larger purchases of goods and services from other businesses. The growth would be additional to the established aquaculture industry in the northern South Island.”

Company CEO Grant Rosewarne says the effects of such long-term productivity generate significant contributions to the economy and community well-being.

“The Market Economics report clearly states the net additional total value added effect of our expansion plans is close to one billion dollars[3] cumulatively over the 2010-2036 study period. That’s a sizeable contribution compared to one-off events such as the Rugby World Cup which had an estimated total impact of $500m.”

Currently NZ King Salmon is the country’s largest fin fish producer producing more King salmon than any other company in the world. It exports around 70 per cent of its production generating some $60 million in overseas funds.

Mr Rosewarne says the report highlights just how much economic impact the business can have locally in Marlborough, in the region and nationally.

“This can all be achieved on the back of a major sustainable export business. We have been a productive member of the Nelson Marlborough community for 25 years and are committed to sustainably growing our business and the economic health of the region for many more years to come.”

Mr Rosewarne says if the company achieves the additional capacity it is aiming for it will be able to provide three to four times the average growth rate of other sectors of the regional economy. He is urging New Zealanders to support his company’s application.

“A positive submission is a rare opportunity for people to add huge value to Marlborough and New Zealand, The submission process need not be lengthy and a short submission may only take a few minutes.

“There are huge benefits for New Zealand and for Marlborough in our plans but we cannot accomplish those without the support of the community and the ‘silent majority’,” Mr Rosewarne says.

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