Economic development on the West Coast - a backgrounder

  • Jim Anderton
Economic Development

Economic Development on the West Coast.

Introduction
This backgrounder presents a few examples of economic successes on the West Coast in recent times.
It is not intended to be a complete report on the West Coast economy, but rather to give an indication of some of the successes and good stories that the Coast is entitled to be proud of.
The overall picture suggests that there is cause for optimism on the Coast. Economic activity is on the rise.
No one doubts that the West Coast has seen some hard times over the years. But the West Coast economy is turning the corner, and it has good stories to tell. It can only help the West Coast to tell those stories to the rest of New Zealand, to help attract back services, investment and jobs.
As the Chairman of the West Coast Development Trust, Frank Dooley, has commented publicly, Whenever the West Coast appeared on TV1 news it’s always for moaning about what we never had and we’re always crying over spilt milk. It doesn’t create a very good image to the outside world….We’ve got to start selling the positive things about the West Coast, and there are plenty of them.”
The information in this backgrounder is drawn from independent sources.

Economic activity
“The West Coast recorded its sixth successive quarterly rise in economic activity. Residential and commercial construction consents both grew strongly. Accommodation guest nights recorded a rise, contrasting a small drop nationally. However, retail trade, car registrations and house sales were weaker in June. Nevertheless, year-on-year economic growth in the region edged up to a seven year high.
“Positive influences on activity in West Coast in the June quarter included: commercial building consents and dwelling approvals. Negative influences included: retail trade, car registrations and house sales.”
- National Bank ‘Regional Trends’, September 2001. http://www.nationalbank.co.nz/economics/regional/200108/

More businesses
The number of businesses registered on the West Coast has increased by nearly 4% since 1999 (from 2338 to 2429), and increased by 10.9% since 1997 (when there were 2191 businesses registered).
-Statistics NZ Business Demographic Statistics, Quarterly regional data series.

More jobs
Unemployment on the Coast is at 2.9 per cent.
The number of employed Coasters had grown from 15,400 to 16,500 since December 1999.
-Figures compiled by the Parliamentary Library from the Household Labour Force Survey, 28 August 2001.

Number of Full-time Equivalent Persons Engaged – West Coast
199910,000
200010,480.
Increase: 4.8%
-Statistics New Zealand Business Demographic Statistics.

More pay
Average hourly earnings on the West Coast have increased by 12.8% from $15.45 in February 1999 to $17.44 in May 2001.
National average: $18.28.
-Source: Quarterly Employment Survey.

What does the West Coast say?
“We’ve got to start selling the positive things about the West Coast, and there are plenty of them.”
-West Coast Development Trust chairman Frank Dooley, The Press, 18 May 2001.

“The Grey District economy has come a long way from its pioneering days. For a long time, the economy was underpinned mostly by the exploitation of its natural resources such as timber, gold, coal and fish. Today, while these industries are important, the economy generally has diversified with reliance on its traditional mainstays slowly giving way to newer industries.
“The last twenty years have seen diversification in the form of a new meat processing plant at Kokiri, small scale artesian industry developed and consolidated a flourishing sphagnum moss industry, growths in fabrication and engineering along with increased coal production and exports.
“Recently, the revival of the Port of Greymouth has allowed import and export trade to Norfolk Island and Australia. This trans-Tasman trade has been absent from the local scene for many years. The development of the Port of Greymouth will be central to any economic expansion of the West Coast region."
-http://www.greymouthnz.co.nz/industry.htm

“The Buller Economic Development Board says it has created 33 full-time and part-time jobs in Buller since it began a year ago.”
-Westport News, 8 October 2001.

Construction
Whether it is the "one-man-band" or a large firm, the construction business on the West Coast in general is often at full stretch.
Maintenance of the highways is a constant programme partly due to the increase in tourist traffic, partly due to opening new areas and partly due to improvement and modernisation.
Other construction activities, which have been undertaken by West Coast industries, include the "Otira Viaduct" on the Arthur's Pass route into the district; the hospital upgrade; highway re-alignment; factory expansions and Port Development.
-http://www.greymouthnz.co.nz/construction.htm

Education
Tai Poutini Polytechnic opened in Greymouth on the South Island's West Coast in 1990 with 90 students. It has seen unprecedented growth with over 500 students in 1999.
-http://www.taipoutini.ac.nz/polyinfo.asp

Energy
Trustpower has announced plans for a $100m hydropower scheme at Dobson and increased transmission cabling will be installed over the next few years.
Westgas has recently announced plans to develop the natural gas resources of the produce electrical power locally and through the national grid. Local gas cylinder supply and heat exchange facilities will be valuable by-products of this project.
-http://www.greymouthnz.co.nz/industry.htm

Fish & Fish Processing
The West Coast and the Grey District are part of the "Challenger" fishery area - one of the richest resources for fishing in New Zealand.
Traditional landing of blue cod, groper, hake, rig, gurnard and sole have been supplemented with specialist, high value market products such as hoki, tuna, squid and orange roughy.
Greymouth is the home to a large fishing fleet that expands during the various fishing seasons as vessels take advantage of the location. 8,200 tonnes of fish were landed in Greymouth in 1999.
-http://www.greymouthnz.co.nz/fish_fishprocessing.htm

Food
Grissini Martini Ltd is New Zealand’s first and only commercial manufacturer of Grissini breadsticks, supplying the hospitality and retail trades nationwide.

Dairy
Westland Dairy produced the highest pay-out of any dairying company in New Zealand in the 2000/01 season, or $5.20/kg of milk-solids.
It is constructing a $60 million extension to its Hokitika plant, to be completed in August 2002.

Tourism
December Quarter figures
QuarterTotal Guest Nights% change since previous Dec
Dec 97188,092
Dec 98220,982+17%
Dec 99221,493+0.2%
Dec 00261,425+18%

March Quarter figures
QuarterTotal Guest Nights% change since previous Dec
Mar 98250,696
Mar 99299,406+19%
Mar 00331,303+10.6%
Mar 01374,180+12.9%
-Statistics New Zealand Quarterly Accommodation Survey.

"Buller visitor numbers are well up on the same time last year. The Westport Visitor Information centre said 33,049 people had passed through its doors to the end of August, just over 4,000 more than the same period last year.
"Reefton Visitor Information Centre had 3,728 visitors in August, over 1000 more than last August."
-Westport News, 5 September 2001.

“Tourism New Zealand figures tell some of the story: between June 1998 and June 1999 international visitor nights on the West Coast leapt from 604,000 to 880,000.
“Everyone agrees the last year has been even busier. Hokitika, a barometer of West Coast tourism, enjoyed a bonanza of a summer.”
-The Press, 30 June 2001.

Buller River swing-bridge attracted an estimated 30,000 paying tourists this season.
“Anna and Colin Gill have just finished a restaurant setting 20-plus in the Hampden Hotel and extended the kitchen. ‘Eight years ago our happy hour would attract 80 to 90 locals,’ says Colin. ‘Now we have about 20 locals and about another 50 to 70 tourists and travellers eating and drinking.’ The call for accommodation in town is also increasing. The couple say their 20 beds have an annual 80 per cent occupancy rate and they work with local motels to find beds at peak times.
-Nelson Mail, 24 March 2001

"Buller Experience Jet has extended its commitment to Murchison with the acquisition of a Hughes 500 Jet chopper offering access all the best areas for heli hunting, rafting, kayaking, tramping, fishing and scenic flights in conjunction with jet boating the mighty Buller River."
-http://murchison.co.nz/us.html

The eco-friendly Scenic Circle Punakaiki Rocks Hotel opened for business in December 2000, the first for Punakaiki.

Visitor numbers at the Hokitika Wild Foods Festival have grown from 1,800 in its inaugural year to almost 20,000 in this, it’s 12th year.

Forestry and wood processing
“Log production is forecast to double by 2003 and opportunities are available for additional investment in wood processing. [Evergreen's] West Coast estate comprises mostly mature forests. Future log supply from the West Coast forests will be sought by local saw millers that are making the transition from cutting indigenous species to radiata pine.”
http://www.evergreen.co.nz/landholdings.htm
“Smith and Jensen are expanding their silviculture contracting business from the Timberlands West Coast forests to provide pruning, planting, and spraying services in the privately owned pine forests.”
-The Press, 19 June 2001.

Manufacturing
Around 540 people were employed in this sector in 1999, making the sector the Grey District’s second highest employer. Businesses include servicing the gold & coal industries, fabrication of equipment and general light engineering.
Dispatch and Garlick Rotary Milking Platforms -- produced by a Greymouth foundry -- can be found in Mexico, USA, Denmark and the UK.
-www.dispatchgarlick.co.nz

“They are flat out spinning yarns in Westport. Nothing unusual in that, except that these ones are being spun into socks by the town’s newest employer, the West Coast Socks factory.
“Conceived as an idea just six months ago, the factory turned its first sock on Monday and expects to get the first consignment away on Friday. The fledgling business has big supply contracts to The Warehouse and Postie Plus.
“The sock company owes its existence to support from Westport-based clothing retailer Postie Plus and the Buller District Council, which lent $450,000 from its $7 million share of the West Coast forestry package to turn it into reality.
“The result is 18 new jobs and a $40,000 a month injection of wages into the Westport economy.”
-The Press, 20 June 2001.

Sphagnum Moss
West Coast moss is in huge demand around the world, particularly in Japan where the water retention and sterile properties of the moss are used in orchid propagation. The resource is managed on a sustainable basis with a picked area able to rejuvenate between 5 to 7 years. 1500kg of hand harvested wet moss can be dried to 100kg and at around $20 per kg, the industry is a large contributor to the local economy.
-http://www.greymouthnz.co.nz/sphagnum_moss.htm
Some of distcinctive businesses are associated with spaghnum moss including Moonlight Moss, Superspag Ltd, and Suttons Moss.
Transport
Expanding port activities in coal, fishing, timber and general cargo. A direct shipping link with Auckland, Port Kembla and Yamba in Australia has been established.
http://www.greymouthnz.co.nz/commerce.htm

“An unscheduled spot shipment of Stockton cola for an Australian carrier will be barged from Westport to Port Kembla in New South Wales early next week.
“TranzRail is at full capacity transporting coal to Lyttelton meet Solid Energy’s existing export contracts.”
-Solid Energy news release, 19 September 2001.

Coal
“Coal export sales by Solid Energy reached a record level of 1.65 million tonnes for the year to 30 June, up 16% on the previous year and the highest annual volume since the company began exporting in 1976.
“High levels of demand for New Zealand's high quality coal mean order books for next year are fill and the company is already on target for a second record year in 2002. All coal exports are from the West Coast, nearly all coming from Solid Energy mines.
“An agreement signed with Reefton-based Francis Mining last month will see the two companies working together to further market West Coast coals to high value steel and carbon buyers.”
-Solid Energy news release, 10 August 2001.

“Two New Zealand contractors and an Australian mining company have been invited by coal producer, Solid Energy New Zealand Ltd, to tender for construction and operation of a new opencast mine within the company's Strongman mining licence area.
“Solid Energy has also issued an open tender for construction of a new 1.4 km haul road, extending the company's existing road to the Strongman 2 underground mine.
“Two coal seams identified at Strongman North Opencast have the potential for producing up to 300,000 tonnes per annum for two to three years.
“Construction of the road and preparation of the mining area is expected to start at the end of August with coal winning scheduled to start in early 2002. Up to 12 mining jobs will be created by the development.”
-Solid Energy news release, 13 August 2001.

“New Mine Development ‘another Positive Step for Solid Energy and Reefton.’
“West Coast/Tasman MP, Damien O'Connor today officially opened Solid Energy's new development of coal reserves at Terrace Mine, Reefton.
“Speaking to an audience of civic leaders, business people, Reefton residents and Solid Energy staff, Mr O'Connor said: ‘This development is another positive and solid step forward for Solid Energy and Reefton.’
“Over the last two years coal producer and exporter, Solid Energy, has spent $2.3 million developing access to approximately nine million tonnes of new in ground coal reserves, which will extend the life of Terrace Mine by more than 50 years. Annual output is expected to rise from 40,000 to 50,000 tonnes per annum and increase jobs at the mine from eight to 14 full-time positions.”
-Solid Energy news release, 22 March 2001.

“Greymouth contractor Ferguson Brothers Industrial Division has won the contract to construct a 1.5 kilometre haul road to access the planned new Strongman North opencast mine.
“Up to 24 new mining jobs will be created in the $20 million development.”
-Greymouth Evening Star, 24 September 2001.

“A year after moving its key Buller managers elsewhere, Solid Energy has had a change of heart. It is reopening a Westport office, with a new local business manager and a team of five or six people.”
-The Press, 16 December 2000.

“Solid Energy International has won a $60 million contract from a Japanese steel mill – and a Trade New Zealand Export commendation for its efforts….To meet the increased demand generated by the Nippon Steel deal, SEI was developing a new coalmine on the West Coast in partnership with Todd Energy [at Spring Creek].”
-The Press, 4 November 2000.

Exploration
Shell Petroleum Mining is currently conducting seismic surveys for oil and gas in a largely unexplored region, to the north and offshore from Haast. The week-long survey will cost around $1 million.
-Greymouth Evening Star, 6 Sep 2001.

Film
“A VILLAGE is taking shape in Charleston's Nile River Valley for the dinosaur movie, Lost World, to be filmed in the area. Builders started work three weeks ago and a film crew of 20 arrived in Westport this week.
“BBC producer Christopher Hall, who is heading the project, met Buller mayor Pat O'Dea and council economic development officer Garry Howard yesterday.
“Mr Howard said the film was already creating local revenue with the film and construction crews staying in Westport. They had bought timber and hired construction equipment. Local people would be hired to work on the set and for transport and catering.”
-NZPA, 1 February 2001.

Neighbouring regions
Nelson's low unemployment has prompted fears of a labour shortage heading into the busy fruit-picking season.
Nelson Pipfruit Growers New Zealand representative Julian Raine said with the harvest only 10 days away, the lack of pickers was a problem.
Work and Income New Zealand said that the number of registered job seekers in Nelson during December was 21 per cent lower than at the same time a year ago.
Commerce Nelson president Gary Stocker said the latest statistics reinforced his concerns about a possible labour shortage in the region. Mr Stocker said: "in the past Nelson was competing (for staff) with larger New Zealand centres. We're now competing with Sydney and London."
-The Nelson Mail, 9 Feb 2001.