Local businesses take chance to sell themselves

By Yoke Har Lee

This week's Apec summit will be the single, largest opportunity ever presented for New Zealand to sell itself as an investment destination.

Two separate "promoters" are showcasing New Zealand's best industries to foreign companies: the New Zealand Trade Development Board (Trade NZ) and the Apec Chief Executive Summit.

Trade NZ's approach is through its special investment programme (SIP) to court targeted high-value foreign companies, to look at what New Zealand industries can offer by way of technology.

This is seen by Trade NZ as an opportunity to put New Zealand on the radar screen of those targets. It has arranged for 13 foreign chief executives attending Apec programmes, to meet with local companies to show what New Zealand can do.

The Apec CEO Summit, which is the other promoter, has adopted the approach that selling foreign direct investment per se is not the answer - hence its pitch is on presenting how New Zealand is relevant to these foreign firms' global strategic business development.

While the test of how effective the two approaches are will only unfold way past the Apec event, one thing is certain: to most of the world New Zealand remains a nice tourist place and its best capabilities remain largely untold.

So far, no approach can be held up as a model for future efforts.

Critics say New Zealand's approach to attracting investments has remained largely amateurish.

One suggestion has been that international businessmen running global businesses should be recruited into helping New Zealand design a properly formulated and practical approach to attracting investment.

The picture of foreign direct investment is bleak.

Latest data released by the Overseas Investment Commission shows $2 billion of inbound foreign investment has been approved in the first six months of this year. But except for $200,000, all of it was to buy existing assets or businesses.

Statistics New Zealand says that of the $10.5 billion in profits earned by foreign investors in the three years to March, $9.4 billion was paid out in dividends. Only a small percentage of the profits was being reinvested in the businesses.

Errol Clark, chairman of the Apec CEO Summit strategic investment group, told the Business Herald the programmes run by the CEO Summit and Trade NZ did not double up.

Similarly, the chief manager for Trade NZ's SIP, Nick Arathimos, said the two have been working together, playing supplementary roles.

Trade NZ has in instances consulted the CEO Summit on the candidates for its SIP, said Mr Arathimos.

Potential investors from the United States, Canada, Hong Kong, Taiwan and China would be linked up with local companies in the high-tech sectors for networking.

The companies being linked are some of our most celebrated success stories in biotechnology, software development, telecommunications and food processing. For commercial reasons, the names of companies being promoted are withheld.

Mr Arathimos said 50 profiles of "opportunities" have been identified by Trade NZ's investment agents, such as regional development agencies and investment professionals.

Trade NZ has set no hard, dollars-and-cents for how much it hopes will pour in after the meetings. It is keener on building links with the world for New Zealand companies.

"It's the quality we are after, not quantity. In some cases, one deal could be worth 10 others. While we have no bold statement on how much money we want to attract, we are more ambitious than that.

"Our ambition is to sensibly target offshore companies, allowing local companies to network with them to help with the commercialising of technologies quickly."

Mr Clark said the CEO Summit's promotional document - entitled New Zealand's Relevance To Your Company's Global Strategic Development - had been careful to drop the reference to foreign direct investment.

"What we are trying to put across has to do with strategic development of business. We have to because of strategic development's impact on job creation."

During the Apec CEO Summit, the organisers hope to help delegates find something useful.

"We believe a closer look at what New Zealand does well, and why it does it well, will show that we can make a valuable contribution to help them achieve their global strategic business development."