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Report from the Regional Growth Initiative Co-Ordination Committee

Following on from the Regional Growth Forum in April 2013 and the partnership that was formed between Electra, The Horowhenua District Council and Kapiti Coast District Council to jointly fund and support a number of initiatives aimed at growing business and employment within Kapiti and Horowhenua, we are now pleased to present the sector reports and initiatives that have been identified that will assist growth of these sectors.

Both regions have little population growth and economic growth that has contracted since the global recession. While the roading projects will drive growth in the short to medium term the growth of other business sectors is vital for longer term economic and job growth.

Four sectors were identified with growth potential and a “sector leader” was invited to drive each area:

  1. Information and Communication Technology (ICT) - Chris Dyhrberg
  2. Distribution and Logistics - Chris Barber
  3. Service Businesses - Shanon Grainger
  4. Food and Beverage - Jocelyn Eason

A Regional Business Growth Initiative Co-ordination Committee (RBGICC) was formed to oversee the Growth Initiative. Independent Chair with Bryan Jackson, was supported by committee members: David Clapperton, John Yeoman, Monique Davidson, Neil Mackay, Pat Dougherty, Trish McKelvey, Wendy Huston, Ross Leggett, Jocelyn Eason, Chris Dyhrberg, Chris Barber, Ron Parkin, Shanon Grainger and Philippa Richardson.

The committee has met regularly with sector leaders over the last 12 months and the “Next Steps” to further the growth initiatives have been established.

The initial objectives of the initiative for each sector were outlined as:

  • Produce a stock take of the current businesses in the region
  • Determine what the region's resources/attributes are that support the sector
  • Identify the current gaps and roadblocks preventing growth in the region
  • Recommend actions to fix/remove the gaps and roadblocks
  • Identify support resources and incentives available for existing and new businesses
  • Develop an initial selling proposition for business initiatives that will assist growth in the sector.

The Committee (RBGICC) also adopted an overall goal of increasing employment in the region.

Key Findings and Next Steps

The sector report key findings and the next step initiatives that are underway are presented below.

The full reports are available by clicking on each heading.

1. Information Communication Technology (ICT)

For a sector that generally operates “below the radar” in terms of local visibility, the ICT sector in the region is in good health and has real potential for expansion and significant job creation. Six key factors emerged as important for successful business operation: staff, accommodation, infrastructure/connectivity, business connection networks, transport links and business support. The lack of suitable business premises and of opportunities to work collaboratively were identified as the greatest limitation to growth at present. Several larger businesses were looking for office space and companies (both large and small), in Kapiti and Wellington were interested in a purpose built ICT site.

Next Steps: The development of an ICT hub in Kapiti was identified as the key enabler that would help resolve most of the issue that are currently holding back the ICT sector in Kapiti from growing and attracting more businesses into the region. Other recommended initiatives will be picked up as the ICT hub gains traction.

The Kapiti Landing development at Kapiti Coast Airport has been identified as the best location to locate a hub and discussions are under way with the Airport Company to develop concept plans and prove the financial viability for an ICT hub development. Discussions are progressing with a group of local ICT businesses who have expressed interest in being part of driving the development forward and creating an environment that will encourage collaboration and innovation.

Anybody who would like to know more about the ICT hub or to register their interest in being part of the hub can contact Chris Dyhrberg on 027 496 1982, chris.dyhrberg@xtra.co.nz

2. Food and Beverage

In order to understand the attributes of the Kapiti/Horowhenua region that are attractive to Food & Beverage companies, and the major barriers and challenges to growth of the industry in the region, interviews were undertaken with 21 local companies. The companies ranged from artisan food producers to large food processors and growers from Paraparaumu to Foxton. The two largest companies had a combined turnover of more than $50m and employed 250 staff. A further eight companies were exporting and five were looking at export opportunities.

The primary reasons for their location in the Kapiti/Horowhenua region were lifestyle and family connections. The issues perceived to have the greatest impact on growth of current businesses were: difficulties securing appropriate labour, promotion and merchandising in distant national and international markets (e.g. Auckland, China), regulations and behaviours of local councils, competition, lack of management skills and governance capability.

None of the challenges to business growth identified in this report are unique to the Food & Beverage industry. There are however, opportunities for local Food & Beverage companies to be more efficient and develop stronger networks with local, regional and national Food & Beverage initiatives (e.g. Vision Manawatu, Grow Wellington, Food Innovation Network, FoodHQ) and with each other to raise their profile and performance both domestically and in export markets.

Next Steps: Many businesses surveyed were keen to work collaboratively and several of the larger exporters were prepared to offer assistance and share their experiences. An industry-led workshop is planned for businesses wanting to grow nationally and internationally. The outcome of the workshop is to determine interest in a scoping study to gauge national and export growth readiness for local Food & Beverage businesses.

3. Distribution and Logistics

The two areas considered most likely to assist growth in this sector were the potential for transport hubs/distribution centres and the changing physical and regulatory environment that will affect all local businesses. At present the region has little competitive advantage to be a major logistics and distribution hub, however in the longer term Horowhenua in particular has many advantages for a site with good land availability, access to highways, central location and workforce availability.

The environment in which businesses will operate in the region is rapidly changing with three significant changes occurring that will affect all businesses but will be particularly important for the logistics and distribution sector. These are:

Changes to the physical environment with the construction of The Northern Corridor (The Expressway)
Changes in the regulatory environment that affects road funding
Changes to regulations that affect movement of heavy freight

The Northern Corridor project in the longer term will assist with movement of freight through the district. The challenge is to ensure movement of freight and vehicles off the Expressway and around the districts remains efficient during and after completion and works for all the community.

Next Steps: The potential of the Horowhenua as a hub is being progressed by Horowhenua District Council as it fits within the Council's economic development strategy. Defining the key issues and removing barriers to development are the Council's next steps.

To ensure existing local manufacturing, food processing and transport operators are able to grow their business within an efficient logistics and distribution framework careful planning is needed to balance the needs of all sectors affected by freight movement. The issues in this sector are wide ranging, affect communities long term and influence business location and growth strategies. The Electra Business Forum represents a wide range of business sectors and members have contacts locally and nationally. To achieve a robust consultation process Electra will host two planning/information forum's (Kapiti and Horowhenua) with the following desired outcomes:

  • latest plans and strategies are shared with the community
  • the business community is included in road planning discussions
  • planned routes are discussed with local transport operators and NZTA
  • rural communities are included in discussions on road classifications/freight movements in rural areas
4. Service Businesses

Service Businesses have the potential for increasing employment and growing the local economy if the services being sold are being exported out of the local region (nationally and internationally). Service Businesses have relatively low overheads, lower impact on the use of natural resources, fewer safety issues, and frequently do not require manual labour. Many Service Businesses do not require large amounts of highly skilled staff and can provide and support the training of unskilled staff.

From the information gathered it would appear that the attraction of more contact centres and business processing units to the region will increase investment and create jobs in an area that is lacking employment opportunities at present. The two key elements for successful businesses in this sector are: a flexible, medium skilled stable workforce and a low cost operating environment.

Kapiti has limited potential for growth in this sector primarily due to the ease of access to Wellington's higher paid job market for semi-skilled workers and the higher cost of living and land. Horowhenua, however, has the elements for growth in this sector and Horowhenua District Council is supporting this initiative.

Next Steps: The sector report will be presented to the newly established Horowhenua Development Board and the board will facilitate the development of the business case for the sector and determine the next steps.

OVERVIEW

This is an interesting time for the regions and we are taking the opportunity presented by the joint funding from the Kapiti and Horowhenua District Councils and Electra to actively promote and support business growth.

While we do not have the resources to work with every sector, all parties are confident that focusing on the four identified sectors can generate business and job growth. The sectors have initiatives that are, or can be picked up by the private sector and we will continue to keep you informed of progress.

We thank our partners at Electra, Kapiti Coast District Council and Horowhenua District Council for their support.

Bryan Jackson

Committee Chair

Regional Business Growth Initiative Co-ordination Committee