OPENING KIWI CO-OP DAIRY FACTORY MILK POWDER PLANTPrime Minister
Prime Minister Kok, Mrs Kok and your Party, Chairman Mr John Young, Members of the Kiwi Board, special guests, friends, ladies and gentlemen
It is a great privilege to join the Prime Minister of the Netherlands and participate in the opening of this extension to the Kiwi Dairy plant.
I extend a warm welcome to the Prime Minister to the province where I was born.
It is fitting that I should give one of my last speeches as Prime Minister to an audience associated with the dairy industry.
My parents were dairy farmers and I learnt to milk cows at about the same time as I learnt to walk.
The dairy industry of my youth was a vastly different one to what it is today.
Today it is an industry which has maintained a prominent position in world dairy trade by constantly investing in knowledge, technology and marketing.
All of which are required to succeed in markets half a globe away.
The dairy industry is tremendously important to the New Zealand economy.
In the 1997 year, the export earnings from the industry were some $4.4 billion.
The world market for dairy products has remained stable at around 29 million tonnes since 1991.
In this very competitive environment, New Zealand over the same period has lifted its share of international trade from 19 per cent in 1988/89 to an estimated 30 per cent in 1996.
This is a tremendous achievement when you consider that New Zealand has had to compete against heavily subsidised exports in many of our markets or overcome high tariff barriers.
Other countries have extremely high tariff barriers - Japan 615 per cent for butter, Korea 207 per cent for powders, Canada 219 per cent for powders and 325 per cent for butter.
In Europe and North America for non-quota access products, tariffs are generally greater than 220 per cent.
Barriers such as these explain why the New Zealand Government places so much importance and energy in seeking further trade liberalisation - the establishment of the WTO is just the first step in this process.
The next step should be agreement to have the WTO start another multi-lateral trade round at the turn of the century.
New Zealand will continue to vigorously pursue liberalisation of trade, not only for the benefit of our exporters but because we believe it's a very necessary step to improve trade and investment flows around the world.
A necessary step to improve world prosperity.
We argue our case from the strong base of our commitment to eliminate all tariffs before 2010.
Again New Zealand is a leader in this area of international trade.
The dairy industry must be more alert than I was when I was overseas and be aware of, and respond to, the changing nature of the international dairy industry.
In both Europe and the USA, we are already seeing large companies merging to create even larger companies which will exercise considerable strength in the market place.
In the United States of America, four United States Dairy Co-operatives are to merge, giving the company total sales of US$8 billion - more than double New Zealand's world-wide sales.
These are the global forces within which New Zealand must operate - and the effort and success of the New Zealand industry against these odds is commendable.
In recognition of these trends I note that the Dairy Board has been re-organising itself to enable it to better focus on international opportunities, to ensure that market returns are better reflected to the producers, and to develop products which remove the industry as much as possible from the topsy-turvy commodity cycle.
This is essential and necessary, in my view, if the industry is to maintain the momentum it has created in recent years.
Innovation will play a major role in the development of the industry.
During 1997 the Board plans 72 new product launches - 25 per cent of these will be completely new products.
This is a commendable effort by any international standard.
It is pleasing to note that the dairy industry won two of the three major awards at the recent Carter Holt Food Awards - including the "Premi?re Award" for the most outstanding new or improved food product with ANMUM 1 and 2.
I noted with interest the judges comments.
"With Anmum 1 & 2, New Zealand's leading edge milk powder producers have gained the high-ground in Asia.
Their competitors are enormous multi-nationals beaten it appears by a product that had an impressive development and marketing process, which included careful consumer research".
The question the New Zealand industry must ask is how does it continue to achieve such success.
The vision of the New Zealand co-operative dairy industry structure born in the great depression of the '30s has served the industry and New Zealand very well this century.
A new century is upon us, the globalisation of world trade is moving forward, trade barriers are coming down - from New Zealand's perspective too slowly - but everywhere you look change is in the air.
That includes the dairy industry and it's up to this generation of dairy leaders in concert with their suppliers to determine the vision for the 21st century for the production, manufacture and marketing of your product.
An industry as successful as the New Zealand dairy industry will take such a challenge in its stride.
Mr Chairman, I wish to congratulate you and your Directors on the progress that you have made, and to wish you well as you play your part in developing the future strategies for the industry.
Today we mark another milestone in the growth of the industry with the installation of this huge dryer from Holland.
That being so, it is a great pleasure to again welcome the Prime Minister of the Netherlands whose original envoy - Abel Tasman - visited our shores 355 years ago, to now address you on events since then.