Koura Inc Limited - Te Puni Kokiri

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Koura Inc Limited - Te Puni Kokiri

KOURA INC

LIMITED

The Mäori Economic Taskforce sub-committee, the primary sector reference group (PSRG) was

formed in February 2009 to provide strategic input to opportunities for Mäori in the primary

sector. The PSRG was established by Taskforce member Ngähiwi Tomoana, and is chaired by

Wally Stone and includes Paul Morgan, Mavis Mullins, Craig Elision and Graham Pryor.

Following its establishment the PSRG quickly reached the following two conclusions:

• Mäori commercial assets estimated to be $16.5 billion in 2007 or 1.5% of the overall value

of New Zealand’s commercial assets. Over half of these assets are in primary industries ($8

billion). Productivity on these assets is estimated at 1%.

• The PRSG didn’t want to write another report – seeking instead to focus on one industry and

grow productivity by 1.5% to 2%.

In August 2009 the PSRG agreed to focus on one industry (seafood) and one specific product

(lobster) to examine how improvements to the value chain could grow productivity. Ngähiwi

Tomoana says, “Building the project around fish made absolute sense. Every iwi in the country,

via the fisheries settlement, has interests in the fishing industry and it was seen as a natural

fit that Te Ohu Kai Moana would be involved at the initiation stage to help get the project off

the ground.”


The first phase of this project was to produce a comprehensive report examining the lobster

industry. The report recommended Mäori lobster interests, which comprise approximately

30% of lobster quota owners and account for about 43% of total lobster exports, consolidate

their interests into one full value chain entity. The identified Mäori lobster interests were then

approached to explore whether they were willing to ‘collaborate to compete’.

Feedback from consultation showed unanimous support for the concept of full value chain

consolidation. The stakeholders’ preference was to focus on one segment of the value chain in

order to determine whether consolidation of interests was possible. The project then honed its

focus on the marketing and sales of New Zealand lobster into China.

The primary objective of the project is to complete a thorough market research and discovery

process leading to the development of a robust lobster market strategy. The stakeholders, the

PSRG in tandem with the parties, who are now the shareholders of Koura Inc Limited, moved

towards an independent model which was controlled and governed by the Mäori lobster interests.

Koura Inc Limited was fully incorporated on 27 September 2010. Koura Inc Limited has been

established by the shareholders with a finite lifetime; being the duration of this project.

Following preparation of the market strategy the stakeholders, who are now the shareholders in

Koura Inc Limited, will then decide whether to implement the market strategy.

“It’s important to bear in mind all the shareholders in Koura Inc Limited are competitors in the

lobster export business” says independent Chair of Koura Inc Limited Craig Ellison. “This initiative

is the first time Mäori lobster interests have worked together and represents important first steps

towards a growing sense of kotahitanga between these traditionally rival commercial entities.”

Each of the shareholders has invested their own capital and intellectual property into the

project and participate in the appointment of directors on the Board of Koura Inc Limited. The

philosophy behind the company is one of kotahitanga (unity) and other iwi who are interested

are able to join the company.

For the iwi shareholding entities, this model creates business efficiencies and opportunities.

The New Zealand lobster industry, for all its profitability, relies principally on one product

(live lobster) and one market (China, predominantly via Hong Kong). Today, China consumes

approximately 85-90% of all lobster caught in New Zealand compared to just 30% 15 years ago.

Lobster has been a consistently strong performer within the New Zealand seafood industry,

particularly over the last 3-4 years with the current statistics highlighting its importance and

value to the industry. The export statistics for 2009 show lobster as the second highest revenue

earner behind mussels whilst the recent Statistics NZ “Fish Monetary Stock Account 1996-2009”

values the total lobster quota at $770m, second behind hoki at $815m and nearly $500m ahead

of third placed paua at $300m.


NZ Export Revenue 2009

Top 10 Species Export Revenue (NZ$) - 2009

225

N Z E X P O R T R E V E N U E 2 0 0 9

( N Z $ m )

200

175

150

125

100

75

50

25

0

Mussels Lobster Hoki Squid Salmon Orange

Roughy

Paua

Jack

Mackerel

Ling

Snapper

Despite lobster being a high value luxury item it remains a commodity traded product with the

sales and price setting process based on elementary supply/demand economics and essentially

operating on a daily spot market. Inevitably this results in a high degree of volatility and

uncertainty when assessed over the long term, as is the case with a number of other

New Zealand primary sector products. Very rarely, if ever, are lobster sale transactions pre-set

for any defined period of time.

Also, there are traditional periods of the year when the buyer has greater influence (generally

through the late spring/summer/autumn months when world supply is highest) and when the

New Zealand exporter has greater influence (winter/early spring months when global supply

is low). Hence the relative success or failure of price negotiations largely hinges on the global

supply versus China demand equation on each given day.

Koura Inc Limited recognises that its true competition in the export market is not between its

shareholders or other players in the NZ lobster industry but comes in the form of alternative

lobster species and other high value, luxury seafood products” says Chair Craig Ellison.

Some of the potential benefits from the project includes:

• Growing a sense of kotahitanga (unity) amongst Mäori lobster interests.

• Securing a stronger market influencing position for New Zealand lobster exporters.

• Gaining a greater understanding of, and ability to penetrate further along, the in-market

value chain.


• Generating greater consistency of sales volumes and prices across the year.

• Providing more control over the distribution and sales channel.

• Developing a greater understanding and relationship with the end Chinese consumer.

• Ultimately assisting to decrease the level of risk faced by the New Zealand lobster interests.

• Developing a greater understanding of, and progressively move closer toward, the end

customer in China.

• Building reliable, long term distribution channels, partnerships, customer base and

relationships required to under-pin lobster exports to China.

• Assessing and evaluating the capacity for higher priced sales of lobster to smaller niche

markets in specific Chinese mega-cities.

Both the lobster quota ownership and exporter profiles highlight the position that Mäori have in

the New Zealand lobster sector and their ability to demonstrate true leadership and drive sector

improvements right across the value chain.

“Clearly, a rising tide raises all boats and there will be benefits for the wider lobster industry

resulting from this project” said Craig Ellison. “Koura Inc Limited appreciates and acknowledges

the support which has been provided by the Mäori Economic Taskforce and staff at Te Puni Kökiri

in allowing this important project to proceed.”

For more information on the Mäori Economic Taskforce and their work go to

www.tpk.govt.nz/en/in-focus/taskforce

Contact the Taskforce

Chair of the Mäori Economic Taskforce: The Hon Dr Pita R Sharples, Minister of Mäori Affairs

Taskforce Secretariat: Carol Berghan

Postal Address: PO Box 18041, Parliament Building, Wellington 6160

Address: Level 7, Bowen House, Wellington

Contact: Phone : 04 817 9800 | Fax : 04 817 6525 | Email : met@tpk.govt.nz | Web : www.tpk.govt.nz

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