Seafood industry in kiwi 'crisis'

The soaring New Zealand dollar is costing Nelson-based exporters millions of dollars and has created a crisis for the seafood industry, key players say.

Sealord chief executive Doug McKay said his company was cost-cutting wherever possible and was continually reviewing labour expenses as it bore the brunt of the appreciating kiwi.

The New Zealand dollar was yesterday trading at over 67USc after posting a 25 per cent gain against the greenback last year.

McKay said the high dollar had thrown the seafood industry into a "crisis situation" and was a huge negative for the industry.

"We've been over 60 [US cents to the dollar] for some time now, and with every cent it increases it gets a lot worse."

Sealord was getting about 50 per cent less for every kilogram of fish it sold to America than in 2001, he said.

The company exported 93 per cent of its product to America, Europe and Japan, and those markets were all affected by the current exchange rate.

The global fish export trade deals largely in US dollars and the current exchange rate had had a bad impact on Sealord's bottom line.

Sealord had an annual turnover of about $600 million.

McKay said the company was focusing on getting higher prices for its product and becoming as cost effective as possible.

New Zealand King Salmon chief executive Paul Steere said his company was finding the strong dollar "horrific".

"It's made at least something like $5 million difference to our bottom line in the last year," he said.

It had been particularly annoying because the catch quality had been good and demand had been strong.

"The values of our products have been severely diluted. Every time we are able to achieve a premium it just gets frittered away," Steere said.

One-third of the company's product was sold domestically, half went to Japan and the balance went to other markets, including America and Australia.

The company was used to fluctuations in the exchange rate but not for extended periods.

Market watchers have predicted the New Zealand dollar will hit as much as 72USc by the end of this year.

- NZPA