P&O NEW ZEALAND:OPENING OF NEW COLD STORAGE COMPLEX

  • John Luxton
Commerce and Industry

DALGETY DRIVE WIRI

Introduction
Sir Barry Curtis, Mayor of Manakau City; Mr John Randal, Managing Director, P&O Cold Storage; other company Executives and staff; other distinguished guests; ladies and gentlemen:

The cold store facility that is being formally opened here today is the culmination of teamwork of many people. It is a credit to that team that the project has been completed within budget.

I am very pleased to be here today to take part in the opening of this major new cold storage and administration complex operated by P&O New Zealand here in Wiri. I recognise the importance of this initiative for New Zealand production and trade, and acknowledge the leading role played by the Group in New Zealand for well over a century.

History
The P&O Group, originally the Peninsular and Oriental Steam Navigation Company, has a long history. Indeed, I note that this year, 1997, marks the companys 160th birthday. Such a significant birthday warrants at least a brief look back.

For 125 of its 160 years P&O has served New Zealand, initially through its association with the New Zealand Shipping Company which was established in Christchurch in 1873 and became completely owned by P&O in 1916.

The New Zealand Shipping Company seems to have given P&O an auspicious start to its New Zealand operations, displaying from the beginning the competitiveness and innovation which continue to characterise the Group today.

There are very few firms in commerce today that have shown the durability of P&O by remaining aware of their market and changing with it.

The early association with the NZ Shipping Co saw an early involvement in the New Zealand frozen meat trade with the Mataura leaving port charmers just four months after the first shipment on The Dunedin.

The company was quick to see the potential growth of the new frozen meat trade. The sailing ships were soon replaced by faster coal-burning steam-powered ships with cargo holds purpose-built for frozen meat storage.

Innovation continued in the twentieth century.

The companys ship Remuera was, in 1922, the first cargo liner trading directly to New Zealand to be converted to diesel propulsion.

The first passenger motorships serving New Zealand were the companys Rangitane , Rangitiki and Rangitata, commissioned in 1929.

Other notable achievements by the company were the first single-class passenger ships (the second-generation Rangitane and Rangitoto built in 1949)
New Zealand Operations
Today P&O has greatly expanded and diversified its operations, both in New Zealand and around the globe. Besides its container shipping services, P&O New Zealand is involved in the timber, catering and cold storage sectors.

Exports
New Zealand remains, first and foremost, a producer of food products - particularly perishable food products. Our major markets for those foodstuffs lie overseas. Your company is a key player in the storage and transport sectors which provide the vital links between New Zealand producers and their overseas customers.

In the year ended December 1996, New Zealand exported foodstuffs worth more than $9.7 billion f.o.b. ($9,728 million). Of that total, some $9.3 billion or 95 percent were foods requiring cool or refrigerated storage. The big items were dairy products ($3.9 billion), meat and meat preparations ($2.6 billion) and fish in various forms ($1.2 billion). In addition, exports of apples and kiwifruit totalled almost another billion dollars while vegetable exports were valued at more than $0.3 billion. Dairy exports in particular showed strong growth over the previous years total.

Domestic
Within New Zealand, through the operation of its cold storage facilities, the P&O Group works alongside many key players in New Zealands materials handling, transport, retailing and food industries.

The company has been quick to seize the opportunities created by the Governments domestic reform programme: the deregulation of the transport industry, the reform of the labour market and the introduction of greater competitiveness in the energy and communications sectors. Facilities such as this one at Wiri are clear evidence of that. A similar initiative is being taken by the P&O Group in Christchurch.

These are very positive developments for New Zealand. They translate the opportunities created by the Governments deregulatory reforms into practical realities:

the aggregation, storage and consignment of New Zealand food products to domestic and overseas markets;

prompt and timely deliveries to New Zealand warehouses, caterers and retail outlets, offering savings on investment in storage space and stocks;

enhanced service to consumers, who have access to a wider range of products, in optimal condition, at competitive prices.
The large new cold store here in Wiri represents the response of P&O New Zealand to demands arising from

increasing agricultural exports, and

the needs of food distributors such as Woolworths to pack fresh produce from bulk for domestic distribution.
This facility is also an example of the forward looking approach of P&Os Executives in recognising the world wide trend of out-sourcing. The United States of America is a good example of the trend where between 60 and 70 percent of distribution and storage functions are out-sourced. In New Zealand the level is somewhere between 5 and 10 percent. Obviously, there is growth potential here.

Technology
The demands made by food producers and customers on the providers of transport and storage facilities have become more complex as expectations have grown more sophisticated. The levels and rates of natural spoilage accepted as inevitable in years gone by would fall far short of the service now regarded as normal.

Technological developments over recent years have led to the adoption of techniques which not only preserve food products during transport and storage but also optimise colour, flavour, appearance and shelf-life by careful selection of packaging materials, storage environments and transportation modes.

Insistence on food safety has encouraged not only the adoption of sophisticated storage and handling techniques but also the implementation of internationally-recognised quality assurance programmes.
Role of Government
The decisions to invest in this facility, and in a parallel development in Christchurch, reflect the confidence of P&O New Zealand in our countrys continued economic growth.

Previous Government administrations made substantial progress toward a more deregulated economy where the commercial sector can make investment decisions with confidence and the market-place can operate independent of Government interventions which may send misleading signals to the business community. It is not for the Government to try to pick winners but for the business community to be able to decide for itself where sound investment lies.

The National-New Zealand First Coalition Agreement signed last December continues the previous commitment on the importance of growth. The Treasurers Budget Strategy Statement on 4 March 1997 confirmed that the Government will :

contribute to a strong, open and dynamic economy by prudent and conservative fiscal management;
maintain a broad-based, low-rate tax system and take opportunities for further reductions in tax rates;
continue regulatory reforms to lower cost structures and maintain labour market flexibility; and
reaffirm the commitment to price stability by requiring the Reserve Bank to keep underlying inflation within the 0-3% band.
Conclusion
In responding to challenges, identifying opportunities, embracing new technologies and striving to serve the needs of both suppliers and customers, P&O New Zealand continues to exhibit the characteristics which lead to its successful establishment in this country some 125 years ago.

As New Zealand has developed and changed, so P&O has grown and adapted, evolving from a shipper of frozen meat to the British commodity market into a storage and freight company delivering a variety of processed food products from New Zealand producers to customers around the world.

I congratulate P&O New Zealand on the construction and opening of this new complex. I am delighted by your tangible vote of confidence in New Zealands future prosperity and I wish the company even more success in the next century than it has already achieved in the past two.