Pitching New Zealand as a “green battery for the world” is just one of the tantalising pitches that Prime Minister Christopher Luxon could spruik in discussions during his upcoming business mission to Japan.
The rise of China and forging stronger security issues in the Indo-Pacific will likely be the focusof formal leader-to-leader talks.
But deal-making, selling more product and luring investment is why some 30-plus business leaders have signed up for the PM’s second international mission.
Officials are looking to the Prime Minister to not only celebrate ties with existing investors but to give confidence to future investors that there is active government leadership in New Zealand - which is important from Japan’s perspective.
Energy security and decarbonisation are major interests for both sides. And New Zealand has a good story to tell.
“We’ve got to make sure that we’re acknowledging their investment and support.
“These are large firms that have come in and backed New Zealand over the years. So, we’ll also take the opportunity to celebrate that.”
Such meetings are unlikely to be open to the entire mission, but will likely include NZ Super Fund head of direct investments Will Goodwin and Morrison CEO Paul Newfield.
Will Goodwin.
The Government sees an opportunity for the Super Fund to make more direct investments, including long-term co-investments with large foreign players to develop New Zealand.
It recently cleared the way for the fund to take controlling stakes in direct equity investments.
As one of the world’s longest-standing specialist infrastructure investors, Morrison currently manages more than US$24 billion of assets.
Newfield - who also has a strong commitment to renewables - took part in high-level investment discussions during the Prime Minister’s earlier visit to Southeast Asia.
Japan is a significant source of foreign direct investment (FDI) for New Zealand.
Japanese companies are invested in New Zealand resources ranging from fishing, forestry, energy and minerals.
The investment has a long-term focus and is of high quality.
Among long-established investors are the likes of Sumitomo Forestry which owns Tasman Pine Forests; Oji Holdings, a leading pulp and paper supplier with packaging operations; and Mitsui which is invested in green hydrogen operations in New Zealand.
Itoham Yonekyu Holdings acquired 100 per cent of meat company Anzco in 2017.
The Tiwai Point aluminium smelter is owned by New Zealand Aluminum Smelter; a joint venture owned by Rio Tinto (79.36 per cent ) and Japan’s Sumitomo Chemical Company (20.64 per cent).
Kirin owns major beer brewer Lion and MUFG recently acquired Link Market Services.
Green hydrogen is a major focus.
Japanese construction and engineering company Obayashi has been present in New Zealand since 2011, delivering New Zealand’s first megawatt-class green hydrogen production facility, called Halcyon Power.
Last month, it completed the acquisition of a 50 per cent stake in Eastland Generation, providing capital for geothermal growth.
The step was initiated by shareholder Eastland Group and its owner Trust Tairāwhiti.
The 50 per cent stake was sold to Obayashi at an enterprise value in excess of $500 million.
Significant groundwork was laid in both Japan and South Korea where in 2019, former Labour Trade Minster David Parker signed a letter of intent for New Zealand to collaborate with Korean interests to develop hydrogen produced in New Zealand using renewable energy - “green hydrogen” as opposed to “brown hydrogen” which uses fossil fuels in the process.
The mission will include companies with renewable energy interests.
Getting your hustle on
NZTE’s Dylan Lawrence says New Zealand needs to be competitive in global markets.
Lawrence says the prime ministerial missions raise New Zealand’s brand.
“We need to be there, to you know, bust down the doors. If we’re not, if they can’t see us, we’re not relevant.
“I’ll tell you what, other countries are out there flying their flag just as competitively as us.
“We can’t just think that the world is ours - to sort of pop in and do this when we need to be competitive.
“We know through a lot of experience that most New Zealand firms underestimate the time, the cost and energy required to grow in international markets - but we’ll do it in partnership with them.”
