Insights Report Agritech NEW ZEALAND 2020 - LIC

 
Insights Report Agritech NEW ZEALAND 2020 - LIC
NEW ZEALAND
      Agritech
Insights Report
           2020
Insights Report Agritech NEW ZEALAND 2020 - LIC
A WARM WELCOME TO THE TIN AGRITECH INSIGHTS
Thanks to our                                                                                                 REPORT 2020 – THE SECOND PUBLICATION
                                                                                                              IN TIN’S NEW SERIES OF NEW ZEALAND
Sponsors                                                                                                      TECHNOLOGY SECTOR INSIGHTS REPORTS.
                                                                                                              Readers who are familiar with TIN will know that the goal of the annual TIN
                                                                                                              Report – which has tracked New Zealand’s most successful tech exporting
                                                                                                              companies for the past 16 years – is not just to identify how big and successful
                                                                                                              the sector is. It is also to understand what success looks like, and how the
                                                                                                              companies achieved that success so that they can be an example and
                                                                                                              inspiration for others to follow. That is what this Report is all about.
                                                                                                              This is also why we were pleased to be approached by David Downs, in his
                                                                                                              role as Lead for the NZ Government’s Industry Transformation Plan (ITP)
                                                                                                              Taskforce, to produce this report. If New Zealand is to create a managed
                                                                                                              plan to grow the Agritech sector, it must firstly look at data that will help
Te Taurapa Tūhono | New Zealand Trade and Enterprise (NZTE) is the New Zealand Government’s                                                                                                             GREG SHANAHAN
                                                                                                              understand which companies have already been successful and why.                           Managing Director,
international business development agency, supporting exporters in order to grow a productive,                                                                                                      Technology Investment Network
sustainable, and inclusive economy.                                                                           Agritech is one of the largest sub-sectors that we track, which is largely
                                                                                                              because it’s also one of the most enduring. Historically, farming was the
NZTE works with all kinds of innovative businesses, including food producers, Māori land trusts and           crucible for New Zealand’s early entrepreneurial and innovation spirit.
iwi, tech startups, service providers, manufacturers, and more. NZTE has around 600 employees                 Legendary figures such as Bill Gallagher, inventor of the electric fence; Bill
and 180 private sector advisors around the world who use their knowledge and connections to add               Hamilton, inventor of the jetboat; Colin Murdoch, the pioneering inventor of
value to ambitious New Zealand businesses who want to go global, for the good of New Zealand.                 the disposable syringes and tranquilliser gun; and aviator Richard Pearse – all
                                                                                                              came from farming backgrounds. This rich heritage of innovation shows New
NZTE operates under the Crown Entities Act 2004, the Public Finance Act 1989, and the NZTE Act 2003,          Zealand’s agricultural and technological histories are inextricably linked.
governed by a board of seven directors and four crown ministers, and is fully committed to the
                                                                                                              Some of the oldest companies in the TIN Report are Agritech firms, with histories
Treaty of Waitangi.
                                                                                                              going back more than a century – and many of the 20 leading agritech companies
                                                                                                              in the TIN200 are distinguishable for their maturity and reliable product delivery.
                                                                                                              However, in an ever changing world that is facing an increased range of
                                                                                                              challenges from surging populations and food production issues, to global
                                                                                                              pandemics, land use and climate change, the Industry Transformation
                                                                                                              Plan is needed to help primary industry evolve as one of the economic
                                                                                                              pillars of New Zealand, and meet the challenges of this new world.
                                                                                                              Today, we have an opportunity to leverage our primary industries even further
The Ministry of Business, Innovation and Employment (MBIE) is the Government’s lead business-facing           with the disruption of modern technology. The world sees New Zealand
agency. Its contribution to improving the well-being of New Zealanders is summarised in its stated purpose:   as a reliable producer of food, so if we can change the unit economics of
to grow New Zealand for all.                                                                                  food production and delivery, that’s transformational for the country.

‘For all’ means all people have an opportunity to participate in and benefit from the economy.                What’s evident from this Report is that there are some very exciting opportunities
For MBIE, a successful New Zealand looks like:                                                                that now exist for Agritech to leverage the experience of the wider tech
                                                                                                              sector to aid this transformation and harness global investment interest
• Prosperous and adaptable people, sectors, and regions
                                                                                                              in NZ tech companies, while also moving the farming community towards
• People are skilled and engaged in safe and fulfilling work                                                  engaging more with this new technology to add value and reduce costs.
• Informed consumers and businesses interacting with confidence
                                                                                                              I commend this report and the TIN team who prepared it. Our deep gratitude
• Value is sustainably derived from the natural environment                                                   also to our sponsors and their representatives for their input, assistance,
• A dynamic business environment fostering innovation and international connections.                          and support through the development of this Report, especially David Downs
                                                                                                              from NZTE, Simon Yarrow and Nicky Molloy from Callaghan Innovation,
                                                                                                              Arek Wojasz from MBIE, and Peter Wren-Hilton from Agritech NZ.
                                                                                                              Finally, to the Agritech companies featured in this Report, congratulations
                                                                                                              on being part of the long history of New Zealand innovation. We
                                                                                                              wish you every success as you continue to grow and transform
                                                                                                              your industry, New Zealand, and the world for the better.
Callaghan Innovation exists to activate innovation and help businesses grow faster for a better
                                                                                                              Ngā mihi
New Zealand by partnering with ambitious businesses of all sizes, and providing a range of
innovation and research and development (R&D) services to suit each stage of growth.
                                                                                                                                                       & THE TIN TEAM
With a team including more than 200 of New Zealand’s leading scientists and engineers, Callaghan
Innovation empowers innovators by connecting people, opportunities, and networks, and providing

                                                                                                              Welcome
tailored technical solutions, skills and capability development programmes, and grants co-funding.
Callaghan Innovation also enhances the operation of New Zealand’s innovation ecosystem,
working closely with government partners, Crown Research Institutes, and other
organisations that help increase business investment in R&D and innovation.

                                                                                                                                                                                                                                    01
Insights Report Agritech NEW ZEALAND 2020 - LIC
Contents                                                                                                                 RT HON Jacinda Ardern

01 Welcome Greg Shanahan                                          25 The Eco-System                                                   “NEW ZEALAND’S PLACE AT THE EDGE OF THE
                                                                                                                                      WORLD HAS BRED A UNIQUE WAY OF LOOKING
Rt Hon Jacinda Ardern / Hon Damien O’Connor                / 03   New Zealand Agritech Eco-System                 / 26
                                                                                                                                      AT CHALLENGES. WE STRETCH OURSELVES,
Data Source and Key Terms                                  / 04   Who is Investing in NZ Agritech?                / 28
                                                                                                                                      GO BEYOND THE ACCEPTED WISDOM AND
                                                                  Investor Profile: Finistere Ventures            / 29                FOLLOW GOOD IDEAS WHEREVER THEY LEAD,
05 New Zealand Agritech Sector Overview                           Game Changers: Where the Tech is Heading        / 30                AND OFTEN WE END UP LEADING THE WORLD.
What is Agritech?                                          / 06                                                                       Isolation has driven us to become innovators, and we’ve had to

The NZ Agritech Sector – The Big Picture                   / 07   31 TIN200 Agritech Company Profiles                                 be creative, practical, and ready to challenge convention. We’re
                                                                                                                                      carrying that approach forward in today’s connected world. The
Summary of TIN200 Agritech Companies                       / 08   TIN200 Agritech Company Profiles                / 32                search for innovation, particularly in technology, never stops.

TIN200 Agritech Companies Cost Metrics Overview            / 09                                                                       We are committed to the wellbeing of all New Zealanders by
                                                                                                                                      supporting our export economy and it’s great to see our technology
2019 Key Markets for TIN200 Agritech Companies             / 10   39 Early Stage Agritech Companies Directory                         companies playing a key role in this. I want to congratulate
Key Insights into the TIN200 Agritech Companies            / 12                                                                       everyone helping put New Zealand at the cutting edge of
                                                                  A Selection of Early Stage Agritech Companies
                                                                                                                                      technology and shaping our nation’s story of innovation.”
                                                                  in New Zealand                                  / 40

12 Indepth: The Companies                                         BioLumic                                        / 40                RT HON JACINDA ARDERN,
                                                                                                                                      Prime Minister of New Zealand
                                                                  PICMI / Pastoral Robotics                       / 41
TIN200 Agritech Companies 2019                             / 14                                                                       (TIN Report Launch, 31 October 2019)
                                                                  Early Stage Agritech Companies Directory        / 42
Agritech Companies in the Regions                          / 16
                                                                  About TIN                                       / 48
NZ’s Agritech Sector: A Plan for Industry Transformation   / 17
The NZ Tech Sector:
Responding to the COVID-19 challenge                       / 18

19 Mavericks
People: Sir William Gallagher                              / 20
                                                                                                                         HON Damien O’Connor
Companies: Livestock Improvement Corporation               / 22
People: Emma Parsons – Agrigate                            / 23
                                                                                                                                      NEW ZEALAND’S LONG HISTORY OF INNOVATION
Companies: Bluelab                                         / 24                                                                       IN THE PRIMARY SECTOR HAS ALWAYS BEEN
                                                                                                                                      SUPPORTED BY HOME-GROWN TECHNOLOGY –
                                                                                                                                      FROM REFRIGERATED SHIPPING TO ELECTRONIC
                                                                                                                                      ON-FARM MONITORING, TO USING SATELLITE
                                                                                                                                      IMAGERY TO IMPROVE PASTURE.
                                                                                                                                      This excellent report highlights the contribution of the agritech sector to
                                                                                                                                      our primary industries, and as a growing export industry in its own right.
                                                                                                                                      The Government is pleased to continue supporting this work with an
                                                                                                                                      $11.4m investment in the Agritech Industry Transformation Plan
                                                                                                                                      as part of Budget 2020.
                                                                                                                                      This work will enable our bold vision of $44 billion growth for the
                                                                                                                                      food and fibres sector over the next decade – keeping us on the
                                                                                                                                      cutting edge in how we grow, prepare and market quality products
                                                                                                                                      fit for a better world, while actively protecting and enhancing
                                                                                                                                      our natural environment and looking after our people.

                                                                                                                                      HON. DAMIEN O’CONNOR,
                                                                                                                                      Minister of Agriculture

02   NZ Agritech Insights Report 2020                                                                                                                                                                               03
Insights Report Agritech NEW ZEALAND 2020 - LIC
Data Source and Key Terms
Published annually, the purpose of the TIN Report is to quantify                               performance of industries, high growth companies, region
the economic significance of New Zealand’s globally focused                                    and ownership structure, helps facilitate commentary around
technology industry by capturing key data on the country’s top                                 particular areas of growth.
200 high-tech exporting companies, known as the TIN200.
The data under analysis in this inaugural Agritech Insights                                    Key Terms
Report focuses on the companies in the TIN200 that were                                        TIN – Technology Investment Network.
categorised under the Agritech secondary sector in the 2019
                                                                                               TIN100 – The top 100 companies (1-100) ranked by revenue.
TIN Report, plus two companies that were categorised under
Agritech as their tertiary sector.                                                             TIN’s Next100 – The next 100 companies (101-200) ranked
                                                                                               by revenue.
Inclusion Criteria                                                                             TIN200 – The combined TIN100 and Next100 (1-200)
To qualify for inclusion in the TIN200, companies must:                                        companies ranked by revenue.
1. Originate in New Zealand*                                                                   EBITDA – Earnings before Interest, Tax, Depreciation, and
                                                                                               Amortisation. It is an approximate measure of a company’s
2. Retain a meaningful presence in New Zealand
                                                                                               operating cash flow.
3. Operate in the ‘High-tech Manufacturing’, ‘ICT’, or
                                                                                               CAGR – Compound Annual Growth Rate. It is the mean annual
   ‘Biotech’ primary sectors
                                                                                               growth rate over a specified number of growth periods longer
4. Have developed their own technology-based                                                   than one year.
   intellectual property
                                                                                               Investment-backed Private are firms that have received
5. Generate at least 10% of their revenues offshore                                            investment from venture capital, private equity and/or
*Foreign acquired companies are included in the report only                                    organised angel investor groups.
where they meet the above criteria, are not subsumed within                                    Foreign-owned companies are firms that have 100%
the parent company, and still provide their own financial data.                                foreign-ownership.

                                                                                                                                                                                                         05
Data Source                                                                                    Research Limitations
The Survey Tool                                                                                Not all companies included in this report chose to
In 2019, TIN directly requested data from approximately 1,000                                  participate. Companies may choose to keep their revenue
companies. Data captured includes revenue and EBITDA [i],                                      confidential during a commercially sensitive phase. TIN’s
expenditure details, best business decisions, employee                                         reports provide an industry overview of New Zealand’s
numbers, sales, and company ownership. Data is aggregated                                      top 200 export-focused high-tech companies, and do not
and trended to create an in-depth profile of the High-tech                                     exclude non-participants. Instead, an estimated revenue
sector and its performance. Certain information is published in                                figure is published and overall analysis is carried out using
the TIN Report for each company [ii], while the rest [iii] is reported                         that estimate. TIN considers all information to be correct
in aggregate to protect commercial sensitivities.                                              at the time of printing and accepts no liability for factual
                                                                                               errors. All companies mentioned in TIN publications
Data Collection                                                                                may contact TIN to amend any incorrect information.

                                                                                                                                                                                          The NZ Agritech
TIN maintains a database of technology companies in New
                                                                                               Limitation of continuity: As the companies in the TIN200
Zealand, which is added to and updated on an ongoing basis.
                                                                                               rankings vary each year, the historical data in this report only
Annually, companies on this database are asked to submit
                                                                                               pertains to the 2019 companies, unless otherwise stated.
key information in an online survey. In addition, TIN collects
data from primary and secondary sources including business                                     New Zealand Equivalents to International Financial

                                                                                                                                                                                          Sector Overview
media, our sponsors, and industry groups. Where surveys are                                    Reporting Standards (NZ IFRS): Effective for reporting
not returned or are incomplete, publicly available figures are                                 periods from 1 January 2019, IFRS 15 is a new accounting
used. If none are available, revenue is estimated[iv] based on                                 standard that introduces the inclusion of useful information
staff numbers, revenue per employee ratios from comparable                                     related to revenues and cash flows. This will change how a
companies, and data supplied in previous years. Once the data                                  significant number of TIN companies recognise revenue going
gathering phase is complete, all companies are electronically                                  forward. Within the TIN companies, some have adopted this
sent a pre-publication check to ensure data accuracy. All                                      standard within FY19 reporting, whilst others will adopt this
companies are asked to confirm the information that is                                         standard from FY20. This change limits historic comparisons
recorded, or to supply adjusted data.                                                          of the data and, where relevant, is noted in the text.

In the analysis of company data, a number of aggregations are
carried out. Primary and secondary sector analysis for relative

i. Financial year ends for the current report are almost exclusively: December 2018; March 2019; and June 2019. ii. Contact details, ownership structure, key products, highlights, and
total revenue. Ownership is current to 31 August 2019. iii. Expenses, research and development activities, company issues, sales and employee numbers by region. iv. As indicated by
an * in the company rankings and profile lists.                                                                                                                                                     PHOTO CREDIT: Paul Sutherland Photography

04     NZ Agritech Insights Report 2020                                                                                                                                                                                                  05
Insights Report Agritech NEW ZEALAND 2020 - LIC
The NZ Agritech Sector
What is Agritech?                                                                             The Big Picture
DEFINITION: Manufacturing, biotech, and digital based technology companies that are
creating product, service, and value chain solutions for the primary sector (agriculture,
horticulture, apiculture, and aquaculture), with the aim of improving yield, efficiency,
profitability, sustainability, and quality.                                                                                                            2
                                                                                                                                                     Gallagher
                                                                                                                                                      Group
                                                                                                                                                      Livestock
                                                                                                                                                    Improvement
                                                                                                                                                     Corporation

                                                                                                                                                    >$200m

                                                                                                                                                                                     TO
                                                                           Robotics /
                  Aquaculture                               Drones

                                                                                                                                                                                      TA
                                                                          Automation
                                                                                                                                                       5

                                                                                                                                                                                         L
                                                                                                                    IE S

                                                                                                                                                                                         AG
                                                                                                                   AN

                                                                                                                                                                                            R
                                                                                                                                                                                            ITE
                                                                                                                                   Argenta       Compac Sorting Equipment

                                                                                                                 MP
                                                                                                                                           NDA Group     Tru-Test Group

                                                                                                                                                                                              CH
                                                                                                                 CO
                                                Internet of
      Agriculture             Horticulture                           Sensors
                                                                                                                                            Waikato Milking Systems

                                                                                                                                                                                                RE
                                                  Things

                                                                                                            20 0

                                                                                                                                                                                                 VE
                                                                                                          TI N
                                                                                                                                             $50m - $200m

                                                                                                                                                                                                     NU
                                                                                                                                                                                                     E$
                                                                                                                                                                                                       1.4
                    Earth                Advanced
                                                         Precision        Resource

                                                                                                                                                                                                           B
                                                                                                                                                     13
                 Observation            Machinery &
                                                         Irrigation      Management
                    Data                Equipment
                                                                                                                    Simcro       BBC Technologies        Lonza      Wyma Engineering (NZ)
                                                                                                                   Dairy Technology Services           Bluelab      Trimax Mowing Systems
                                                                                                                         Figured         South Pacific Sera       Zee Tags     TracMap
                                                                                 Processing                                                   Wildeye      BioStart
         Biotech                                 Vertical                         for High
                                                 Farming                            Value                                                      $4m - $50m
                                                                                  Products

                                                                           Genetics                      A sample of the 109 Early Stage Companies
                                                                           Breeding
                                                                                                      Agrigate   Autogrow        DataPhyll Ltd      Farm IQ      Halter     Knode Ltd      Lanaco    Mastaplex
                                                                                                   NuPoint Ltd   PlusGroup Horticulture        RH Innovation Ltd          RipeTime      RiverWatch   Robotics Plus
                                                                                                                   Trackit Ltd     Tagit     Ubco     Wine Grenade         Woolchemy        Zeddy

                                                                                                                                         Pre-revenue - $4m

                                                                                                                                   ICT       High-Tech Manufacturing          Biotech

06   NZ Agritech Insights Report 2020                                                                                                                                                The New Zealand Agritech Sector Overview   07
Insights Report Agritech NEW ZEALAND 2020 - LIC
Summary of TIN200                                                                                                                  TIN200 Agritech Companies
Agritech Companies                                                                                                                 Cost Metrics Overview
OF THE 200 COMPANIES IN THE 2019 TIN REPORT, 20 (OR 10%) ARE AGRITECH FIRMS.                                                       THE NZ AGRITECH SECTOR EMPLOYS NEARLY 5,000 PEOPLE GLOBALLY WITH
                                                                                                                                   57.6% OF THOSE IN NEW ZEALAND (2,852 PEOPLE). 2019 SAW EMPLOYMENT
Number of TIN200                        Together, these firms generated $1.4B            benchmark of 7.1%, demonstrating          IN THE SECTOR RISE BY 6.6% (308 WORKERS) OUTSTRIPPING REVENUE GROWTH
Agritech Companies                      in revenue in 2019, which is 11.6% of the        the relative strength of ‘Agri-Biotech’
                                        total TIN200 revenue and slightly higher         as a sub-sector in New Zealand.
                                                                                                                                   FOR THE SAME PERIOD (2.7%).

20
                                        than some other sectors with a higher
                                                                                         ICT companies in the Agritech
                                        number of companies. This reflects
                                                                                         sector are represented by just three
                                                                                                                                   Employ:                                   The 20 top Agritech firms’ investment in Sales & Marketing and R&D

                                                                                                                                   4,956
                                        both the size and the maturity of the                                                                                                is relatively low in comparison to the TIN200. This may be a reflection
                                                                                         companies (15%) in the TIN200. This
                                        companies in the sector, with only two                                                                                               of the mature nature of the companies and their focus on existing
10.0% of TIN200 Companies                                                                is in stark contrast to the 47.5% of
                                        companies aged less than 15 years-old,                                                                                               customers and fine-tuning of products.
                                                                                         all TIN200 companies that fall into
                                        and six with revenues over $100m.
                                                                                         the ICT category, which generated                                                   Recent international acquisitions and consolidations in the sector
                                        High-tech Manufacturing companies in             38.7% of TIN200 revenue. However,         people globally                           were a contributing factor to the slower growth in 2019.
                                        the Agritech sector generated just over          it is worth noting that just under half
Total Agritech Revenue                  two-thirds of the sector’s revenue               (47%) of the Early Stage companies

$1.4B
                                        ($964.6m), with large established                (ie. those that fall below the TIN200
                                        companies like Gallagher Group, NDA              revenue threshold) in the Agritech        Average sector wage:                      Average revenue per employee:

                                                                                                                                   $91,020 $282,690
                                        Group, Compaq Sorting, and Tru-Test              sector are ICT companies – a clear
                                        Group dominating the category.                   reflection of the evolving nature, and
11.6% of TIN200 Revenue                                                                  continual modernisation of technology
                                        Meanwhile, Biotech firms contributed
                                                                                         as it is used in agriculture today.
                                        a further 29% of the sector’s revenue,
                                        much higher than the TIN200                                                                (higher than the TIN200 average annual    (higher than the $235,133 average for TIN200 companies)
                                                                                                                                   wage of $82,040)
Growth                                  Revenue of TIN200 Agritech Firms by Category

$37.3m                                              Biotech
                                                    $410.5m
                                                                                                            High-tech
                                                                                                           Manufacturing
                                                                                                             $964.6m
                                                                                                                                   $ Invested in wages and salary:           Cost Metrics as a % of Revenue

                                                                                                                                   $451.1m
3.3% of TIN200 Growth
                                                                                                                                                                                  34.9%

                                                                            $1.4B
                                                                                                                                                                                           32.2%
Average Company Age

31years old
                                                      ICT
                                                    $25.9m
                                                                                                                                   $ Invested in sales and marketing:

                                                                                                                                   $171.4m
(TIN200 average company
age is 29 years)
                                                                                                                                                                                                              16.1%
                                                                                                                                                                                                                                                    13.2%
                                        Revenue Share and Number of TIN200 Agritech                                                                                                                                  12.2%                      12.0%
                                                                                                                                                                                                                                11.1%
5-year CAGR                             Companies by Category

6.2%
                                        % Companies                                                                                                                                                                                   6.9%
                                                                                                                                   $ Invested in research and development:

                                                                                                                                   $97.3m
                                                             60.0%                               15.0%              25.0%
(TIN200 5 year CAGR 8.9%)
                                        % Revenue                                                                                                                                    Wages                       Sales            Research           EBITDA
                                                                                                                                                                                     & Salary                 & Marketing      & Development

                                                              68.8%                                 1.8%             29.3%                                                      TIN200          Agritech Firms

                                          High-Tech Manufacturing     ICT           Biotech                                                                                  *Profitability is measured by EBITDA.

08   NZ Agritech Insights Report 2020                                                                                                                                                                                The New Zealand Agritech Sector Overview   09
Insights Report Agritech NEW ZEALAND 2020 - LIC
2019 Key Markets for
TIN200 Agritech Companies                                                                         NEW ZEALAND IS STILL A KEY MARKET FOR AGRITECH EXPORTERS, AS
                                                                                                  COLLECTIVELY 42.7% OF THEIR REVENUE COMES FROM NEW ZEALAND.
                                                                                                  This is unsurprising given the reliance of the New Zealand   is most likely a reflection of the maturity of the
                                        AGRITECH FIRMS               TIN200                       economy on agriculture, but also suggests that New           distribution chains that companies have established
                                                                                                  Zealand continues to be an excellent location from           in North America and a stronger alignment of the
Total Exports                            $803.3m / 57.3%       $8.7B / 71.9%                      which to develop, test, and monitor products in market.      products with the technology-intensive approach
                                                                                                                                                               to agriculture that exists in North America.
Export Growth                              $22.9m / 2.9%     $881.6m / 11.3%                      Unlike the wider TIN200, the second largest market
                                                                                                  for Agritech companies is North America (24.4%),             Export growth is also being driven by the North American
                                                                                                  with Australia (12.6%) and Europe (10.2%) ranking            market, with Europe also showing a notable degree of
                                                                                                  a distant second and third respectively. This                growth at 5.5%. This traction in the European market
                                                                                                                                                               has largely been driven by acquisitions in recent years
                                                                                                                                                               by Datamars (Simcro, Tru-Test Group) and Tomra
                                                                                                                                                               (BBC Technologies, Compac Sorting Equipment).

                                        North America

                                            % of Revenue                         Europe
                                           24.4%                                                                                                Asia
                                                                                 % of Revenue

                                          Revenue: $342.0m
                                            Growth: 5.0%
                                                                               10.2%              Middle East                                % of Revenue

                                                                                                                                             4.5%
                                                                               Revenue: $142.2m      % of Revenue
                                                                                 Growth: 5.5%
                                                                                                     0.1%                                  Revenue: $63.1m
                                                                                                                                            Growth: -1.1%

                                                                                                    Revenue: $1.9m
                                                                                                    Growth: 12.0%               Australia
TIN200 Export Revenues

Australia                               25.7%                                                                                                                                           New Zealand
                                                                                                                                  % of Revenue

North America 22.6%                                                                                                            12.6%                                                          % of Revenue
Europe                                  12.1%
                                                                                                                                                                                            42.7%
Asia                                     7.4%                                                                                 Revenue: $176.8m
                                                                                                                                Growth: -1.5%

Rest of World                            3.7%                                                                                                                                              Revenue: $597.8m
                                                                                                                                                                                             Growth: 2.5%
New Zealand                         28.5%
10   NZ Agritech Insights Report 2020                                                                                                                                         The New Zealand Agritech Sector Overview   11
Insights Report Agritech NEW ZEALAND 2020 - LIC
Key Insights into the
TIN200 Agritech Sector
THE DATA IN THIS REPORT IS BASED ON RESPONSES COLLECTED BY TIN IN ITS 2019
SURVEY OF NEW ZEALAND TECH COMPANIES, FIRST PUBLISHED IN NOVEMBER OF
THAT YEAR, BEFORE THE DISEASE WE NOW KNOW AS COVID-19 EVEN HAD A NAME.

The unprecedented situation of the global pandemic that the         COVID-19 is set to have a major impact on the
world now finds itself in only half a year since has created such   Agritech sector, but clear opportunities exist
an upheaval in the world economy that any pre-2020 data
must be viewed through the lens of this current situation.          Like every other technology sub-sector in the TIN200,
                                                                    Agritech is grappling with the impacts of the global
Holding that in mind, we can still glean some vital insights        COVID-19 pandemic on its day-to-day business and export
from the 2019 TIN survey data, which can provide a baseline         prospects. However, with 42% of revenue already coming
for the New Zealand Agritech sector to use as a key point of        from local sales in 2019, New Zealand Agritech companies
reference as it takes its next steps towards the challenges         clearly have a strong base to work from in recalibrating and
of a new world economy impacted by COVID-19.                        refocusing their export efforts in 2020. What’s more, with
                                                                    New Zealand’s strong global reputation as a reliable food
2019 was already a challenging year for the                         producer, opportunities exist for Agritech companies to
                                                                    help the primary industries leverage this in ways that will
Agritech sector, but profitability remained strong
                                                                    add more value and help earn more for our produce.
As revealed in the 2019 TIN Report, the combined growth
of Agritech companies in the TIN200 slowed to 2.3%, the
                                                                    Agritech as a sector is ripe for transformation
slowest of any secondary sector in that year. Notably, this
was down from the 15.0% growth rate in 2018. Despite                In 2019, the 20 top Agritech firms’ investment in Sales &
this slower growth, the profitability of the TIN200 Agritech        Marketing and R&D was relatively low in comparison to

                                                                                                                                                       13
companies in 2019 was still strong, with a combined                 the rest of the TIN200. While this is likely a reflection of
EBITDA of 13.2%, up 10.2% from the previous year.                   the mature nature of the companies and their focus on
                                                                    existing customers and fine-tuning of products, it does
                                                                    also hint that the sector is ripe for transformation.
High-tech Manufacturing dominated
the sector, but shifts are evident
                                                                    Now is the time for disruption
High-tech Manufacturing companies in the Agritech sector
generated just over two-thirds of the sector’s revenue              As has been seen in comparable sectors like HealthTech,
($964.6m), with large, long-established companies like              collaboration will be more crucial than ever if disruption is
Gallagher Group, NDA Group, Compaq Sorting, and Tru-                to take place. There are promising signs with significant
Test Group dominating the category. The challenge for               foreign investment interest in emerging companies such as
                                                                    Robotics Plus and Halter. In addition, there is an extensive
the sector is how to rapidly scale these businesses.
                                                                    pipeline of Agritech firms indicating we have an expanding
However, in this environment, it appears the general focus

                                                                                                                                         In-Depth:
                                                                    eco-system, with the skill set and capacity to nurture
for new tech companies is shifting towards ICT solutions,
                                                                    them. We have also seen early stage companies attract
reflected in nearly half (47%) of Early Stage companies
                                                                    the attention of both domestic and international investors,
represented in this Report focusing on this area.
                                                                    a critical ingredient for growth. The path forward for the
                                                                    Agritech sector may not be as clear at present, hence
Consolidation and acquisitions                                      the importance of an Industry Transformation Plan to

                                                                                                                                    The Companies
have slowed growth                                                  progress a clear forward vision for New Zealand agritech.

The Agritech sector has seen considerable changes in
company ownership over the past few years, with several
of the largest TIN200 Agritech companies being acquired                The TIN survey in 2020 will include a range of
by large offshore interests, particularly from Europe. In the          questions for NZ tech companies on how they are
past three years, Norwegian company Tomra has acquired                 dealing with the global pandemic. Results from this
two of NZ’s largest automated fruit sorting companies,                 survey will be published in the 2020 TIN Report,
Compac Sorting Equipment, and BBC technologies. As a                   available in November this year. For more information
result of Datamars’ partial acquisition of Tru-Test Group,             on how your company can participate in this survey,
the company has now been split into two entities; Tru-Test             visit www.tin100.com/faq/ and request a survey.
Group and Dairy Technology Services, the latter of which
remains privately owned. This considerable consolidation
and acquisition activity in the sector is a likely factor for the
slowing of this traditionally high-growth market in 2019.                                                                                    PHOTO CREDIT: Paul Sutherland Photography

12   NZ Agritech Insights Report 2020                                                                                                                                             13
Insights Report Agritech NEW ZEALAND 2020 - LIC
TIN200 Agritech
Companies 2019

2019        NAME                         DESCRIPTION                                2019     PRIMARY SECTOR            FORMATION   OWNERSHIP               2019        2018    GROWTH    GROWTH         2019 PHYSICAL CITY           WEBSITE
AGRITECH                                                                            TIN200                                                             REVENUE     REVENUE         (%)     ($000)      STAFF
RANK                                                                                RANK                                                                 ($000)      ($000)                         EMPLOYED
TIN100 Companies
1           Gallagher Group              Animal management, security,               5        High-tech Manufacturing        1938   Private             $271,000    $250,000       8.4%    $21,000       1029 Hamilton                www.gallaghergroup.co.nz
                                         and fuel systems.

2           Livestock Improvement        Agricultural and software solutions.       6        Biotech                        1988   Public              $246,561    $236,400       4.3%    $10,161        771 Hamilton                www.lic.co.nz
            Corporation
3           NDA Group                    Specialty manufacturing and servicing of   11       High-tech Manufacturing        1997   Investment-backed   $174,000    $162,838       6.9%    $11,162        525 Hamilton                www.nda.co.nz
                                         industrial storage and process vessels.                                                   Private
4           Compac Sorting Equipment     Sorting and automation solutions           16       High-tech Manufacturing        1984   Foreign Owned       $151,900    $145,400       4.5%     $6,500        527 Auckland                www.compacsort.com
                                         for the produce industry.
5           Argenta                      Animal health products.                    21       Biotech                        2006   Private             $114,226*   $114,000       0.2%      $226         420 Auckland                www.argentaglobal.com
6           Tru-Test Group               Agritech products and services.            24       High-tech Manufacturing        1964   Foreign Owned       $107,032*   $139,032     -23.0%   -$32,000        548 Auckland                www.tru-test.com
7           Waikato Milking Systems NZ   Milking equipment manufacturer.            41       High-tech Manufacturing        1992   Investment-backed    $67,640*    $61,750*      9.5%     $5,890        152 Hamilton                www.waikatomilking.co.nz
                                                                                                                                   Private
8           Simcro                       Design and manufacture animal              52       High-tech Manufacturing        1992   Foreign Owned        $49,637*    $49,176       0.9%      $462         190 Hamilton                www.simcro.com
                                         health delivery systems.
9           BBC Technologies             Advanced vision sorting and                58       High-tech Manufacturing        2000   Foreign Owned        $44,110     $35,956      22.7%     $8,154        141 Hamilton                www.bbctechnologies.com
                                         packing equipment.
10          Lonza                        Chemical company developing products       68       Biotech                        1988   Foreign Owned        $35,352     $35,966      -1.7%      -$614         54 Central North Island    www.lonza.co.nz
                                         to meet specific agrichemical and
                                         timber treatment requirements.
11          Wyma Engineering (NZ)        Post-harvest vegetable handling            78       High-tech Manufacturing        1991   Private              $31,000     $34,000      -8.8%    -$3,000        145 Christchurch            www.wymasolutions.com
                                         equipment and solutions.
12          Dairy Technology Services    Dairy technology services.                 92       High-tech Manufacturing        1964   Private              $25,000*    $32,000*    -21.9%    -$7,000         75 Hamilton                www.dairy.tru-test.com
Next100 Companies
13          Bluelab                      Monitoring and control systems for         106      High-tech Manufacturing        2004   Investment-backed    $19,400     $13,900      39.6%     $5,500         64 Central North Island    www.bluelab.com
                                         domestic and commercial plant growers.                                                    Private
14          Trimax Mowing Systems        Manufacturer and marketer of               131      High-tech Manufacturing        1983   Private              $14,364*    $10,550*     36.1%     $3,814         60 Central North Island    www.trimaxmowers.com
                                         agricultural mowing equipment.
15          Figured                      Online financial managment                 138      ICT                            2014   Investment-backed    $12,554*    $10,000*     25.5%     $2,554         58 Auckland                www.figured.com
                                         software for farmers.                                                                     Private
16          South Pacific Sera           Animal-derived biologicals and             147      Biotech                        1988   Private              $10,462*     $8,810*     18.8%     $1,652         57 Canterbury / Upper      www.southpacificsera.co.nz
                                         pharmaceutical contract manufacturer.                                                                                                                               South Island
17          Zee Tags                     Livestock identification.                  157      High-tech Manufacturing        1991   Foreign Owned         $9,502*     $9,238*      2.9%      $264          40 Auckland                www.zeetags.com
18          TracMap                      GPS guidance and mapping system.           174      ICT                            2005   Private               $6,800      $5,800      17.2%     $1,000         50 Otago / Southland       www.tracmap.com
19          Wildeye                      Internet of Things based technology        178      ICT                            2002   Private               $6533*      $5000*      30.7%     $1,533         35 Auckland                www.mywildeye.com
                                         for agriculture, environmental,
                                         and water monitoring.
20          BioStart                     Biological fermentation products for       197      Biotech                        1994   Private               $3,934      $3,900       0.9%       $34          15 Auckland                www.biostart.co.nz
                                         use in agriculture and horticulture.

                                                                                                                                                                                                                                                     *Estimated revenue.

14   NZ Agritech Insights Report 2020                                                                                                                                                                                               In-Depth: The Companies        15
Insights Report Agritech NEW ZEALAND 2020 - LIC
Agritech companies                                                                              NZ’s Agritech Sector:
in the Regions                                                                                  A Plan for Industry Transformation

129
                                                                                                IN JULY 2020, THE GOVERNMENT WILL RELEASE ITS REFOCUSED
                                                     Auckland                                   APPROACH TO INDUSTRY POLICY. THE CORE OF THIS NEW
                          Companies                                                             APPROACH IS THE DEVELOPMENT OF SECTOR PLANS OR INDUSTRY
                                                                         Central North Island   TRANSFORMATION PLANS (ITPs) FOR SELECTED SECTORS OF THE
                                                      37
(20 x TIN200 and 109 x Early Stage companies)
                                                                                                ECONOMY WHERE SIGNIFICANT GROWTH OPPORTUNITIES EXIST,
                                                                                                OR FOR SECTORS THAT ARE FACING SIGNIFICANT DISRUPTION AND
Locations of the
TIN200 Agritech Companies
                                                         Hamilton
                                                                                 24             NEED SUPPORT TO RESET AND TRANSITION, OR THOSE SECTORS
                                                                                                THAT MAY NOT BE AREAS OF STRONG GROWTH POTENTIAL, BUT
AUCKLAND                                                                                        NEED TO BECOME MORE RESILIENT AND/OR SUSTAINABLE.
Tru-Test Group
Compac Sorting Equipment
Argenta
Zee Tags
Wildeye
BioStart
                                                           20                                   An ITP is a long-term strategy developed with key stakeholders
                                                                                                across the wider sector eco-system that provides a clear
                                                                                                picture of the challenges and opportunities faced by each
                                                                                                sector, agrees on a long-term vision, and sets out an action
Figured                                                                                         plan that spans a wide range of areas, including research,
                                                                                                science and innovation, trade, education, and skills.
CENTRAL NORTH ISLAND                               New Plymouth                                 Agritech was selected as a priority sector because of its
Lonza                                                                                           importance to New Zealand’s transition to a highly productive,
Bluelab                                                                                         low-emissions future, its adjacency to our strong food and

                                                        2
Trimax Mowing Systems                                                                           fibre sector, and our existing expertise and investment in this
                                                                                                area. The emergence of Agritech New Zealand and their role
HAMILTON
                                                                                                in providing a cooperative partner for the Government in this
Gallagher Group                                                                                 sector was also an important factor.
Livestock Improvement Corporation
NDA Group                                                                                       Through the ITP document, the Government aims to provide
Waikato Milking Systems NZ
Simcro
BBC Technologies
Dairy Technology Services
                                                                                 2              the Agritech sector with support to accelerate its growth,
                                                                                                attract necessary investment, increase commercialisation of
                                                                                                New Zealand agritech intellectual property (IP), address global
                                                                                                opportunities and increase exports, develop needed skills and
                                                                                                address regulation, and data interoperability issues.
                                                                                                                                                                                  DAVID DOWNS, Agritech ITP Taskforce Lead
CANTERBURY /
UPPER SOUTH ISLAND
                                                                          Wellington /          Part 1 of the document will present the context, challenges and

South Pacific Sera                                                     Lower North Island       opportunities for the sector. Part 2 will set out an agreed vision
                                                                                                for the sector, and outline a response to the issues presented
Wyma Engineering (NZ)                                                                           in Part 1, focusing primarily on the factors that industry,
                                                                                                government, workers, and the broader Agritech eco-system                           “New Zealand has the

                                                                    21
OTAGO / SOUTHLAND                                                                               can collaborate on together. The final section, Part 3, will
TracMap                                                                                                                                                                            opportunity to be a world
                                                                                                outline an action plan consisting of High Impact Projects and
                                                                                                                                                                                   leader in this area, and to
                                                                                                a broader eco-system development plan, to help the Agritech
                                                                                                sector achieve its vision.                                                         see significant economic
                                                                                                                                                                                   benefit from our activities,
                                                                                                We know that a ‘business as usual’ approach will not result in
                                                                                                                                                                                   while also using technology
                                                              Canterbury /                      transformation. Funding the activities and initiatives resulting
                                                                                                from this work will be a critical part of ensuring the actions                     to reduce our impact on the
                                                            Upper South Island                  lead to meaningful growth. Reflecting this, the Government                         land. Agritech is right at the
                                                                                                has committed $11.4m as part of Budget 2020 to implement                           nexus of New Zealand’s past and future.”
                                                                                                the action plan of this agritech ITP. This will allow us to now
                                                                                                proceed in earnest and in partnership with industry to make

                                                       9
                                                                                                                                                                                   HON PHIL TWYFORD
                                                                                                this plan a reality and start progressing towards our vision for                   Minister for Economic Development
                                                                                                New Zealand agritech.
                                                                                                DAVID DOWNS, Agritech ITP Taskforce Lead

                                                Otago / Southland                               The above summary is adapted from the NZ Government’s Industry Transformation Plan for the Agritech sector, for which this TIN Agritech Insights Report
                                                                                                has provided supporting information. To access the full plan, go to: https://www.mbie.govt.nz/dmsdocument/10750-growing-innovative-industries-in-
                                                                                                new-zealand-agritech-in-new-zealand-industry-transformation-plan-

16    NZ Agritech Insights Report 2020                                                                                                                                                                                 In-Depth: The Companies        17
The NZ Tech Sector:
Responding to the COVID-19 Challenge
                                                             The Agritech New Zealand
 THE CURRENT CHALLENGES THAT                                 Insights Survey
 THE GLOBAL ECONOMY IS FACING IN                             The Agritech New Zealand Insights
 RELATION TO THE ONGOING IMPACT                              Survey took place between Tuesday,
                                                             31 March and Thursday, 9 April 2020 with the purpose of
 OF THE COVID-19 PANDEMIC CANNOT
                                                             obtaining a better understanding of the New Zealand agritech
 BE UNDERESTIMATED.                                          sector’s resilience and business continuity planning, both
 However, as difficult as they have been, I am               during the COVID-19 lockdown and beyond. The results were
 encouraged by the leadership and unity that has             designed to help Agritech New Zealand identify new measures
 been displayed in New Zealand in response, which            that might assist kiwi agritech businesses navigate New
 is a positive sign that NZ’s prosperity, growth,            Zealand’s planned economic recovery.
 and harmony will continue beyond this crisis.               The respondents’ answers to the open and closed ended
 I am also encouraged by the fact that 2019 saw the most     questions highlighted several major areas of concern.
 successful year on record for New Zealand’s technology      These included, access to funding, access to customers,
 export sector, reflected in the 2019 TIN Report. Over the   and access to markets.
 past 20 years, the technology sector has helped create
 an exciting diversity in our export economy, and grown       50.53%                                             *Total respondents 95
 to the point that it is our third largest export earner.
                                                                               35.8%

                                                                                                                                                                              19
 What’s more, many of the companies that have appeared                                                                      32.6%
 and succeeded over that time – including a significant                                       28.4%
 number operating in the agritech space – are strong,                                                           18.9%
 robust, innovative, and well placed to continue to
 be so in an ever-changing, unpredictable world.
 Tech has succeeded as an industry in New Zealand
 because of the positive inclusive dialogue that is a         Access to       Access to      Access to       Access to      Other
 hallmark of our society, which in turn is imbued in          customers        funding      supply chain       staff
 our companies. This translates to clarity of purpose
 and focus in delivery of our technology solutions.
                                                             What are the biggest risks to your current business activity?
 It’s why I’m confident that a post COVID-19 recovery
 will not only deliver a resurgent tech sector but a         Based on the results of the survey, Agritech New Zealand
                                                             believes that the closed borders will significantly impact

                                                                                                                                         Mavericks
 more confident, prosperous New Zealand that is
 prepared to navigate new global realities. It will bring    the ability of agritech businesses to grow their offshore
 no end of challenges, yes – but in such a world, we         sales in the short to medium term. To compensate for the
 are increasingly the authors of our own destiny.            inability of entrepreneurs to travel overseas, a novel set of
                                                             support mechanisms need to be put in place to ensure that
                                                             international markets remain open to New Zealand’s agritech
 As companies focus on                                       sector post the relaxation of border controls.
 the reality of the current                                                                                                              The technology sector in New Zealand has a long tradition of
                                                             It is clear that novel solutions also need to be considered to
 global pandemic                                             address the funding issue. The unprecedented nature of the
                                                                                                                                              combining intellectual smarts with deep practical skills.
 situation, we should                                        COVID-19 pandemic means that many potentially high-growth                           As key contributors to this tradition, TIN’s Mavericks
 not be afraid to look for                                   New Zealand Agritech businesses have been exposed at the                           represent the Kiwi characteristics of commercial and
 ways that we can harness                                    most important part of their funding cycle.                                             technical innovation, and pioneering leadership.
 the ‘slingshot effect’                                      Agritech New Zealand is delighted
 that technology offers as                                   by the NZ Government’s Budget
 we come out from under the rock of                          commitment of $11.4m to support
 COVID-19. Though painful, it also presents                  the Agritech Industry Transformation
 a unique opportunity for New Zealand tech                   Plan. We believe it can create
                                                             significant opportunity for New
 businesses to emerge from this not only
                                                             Zealand’s agritech businesses,
 intact, but on a healthy growth trajectory.                 both short-term and long-term.

 GREG SHANAHAN                                               PETER WREN-HILTON Executive Director, Agritech NZ
 Managing Director, TIN
                                                             Full results of the Agritech NZ survey and can be viewed at
                                                             www.agritechnz.org.nz                                                                                   Photo courtesy of Livestock Improvement Group.

18   NZ Agritech Insights Report 2020                                                                                                                                                                          19
People:
Sir William Gallagher
WHEN THINKING ABOUT THE GREATEST NZ AGRITECH ‘MAVERICKS’ – DEFINED
BY TIN AS REPRESENTING THE KIWI CHARACTERISTICS OF COMMERCIAL AND
TECHNICAL INNOVATION, AND PIONEERING LEADERSHIP – THE NAME THAT
INVARIABLY LEAPS TO MIND IS SIR WILLIAM GALLAGHER.

                                                                “Over the sixties when I joined the company, electric fencing
   His company, Gallagher Group, appeared on the                changed quite dramatically,” Gallagher says, “but it was
   very first TIN company listing in the inaugural              1970 before we really got it commercial. I started looking
   Report in 2005, and has ranked highly on the                 into exporting at that point and my father said to me, well
                                                                it’s never going to work but you’re welcome to try.”
   TIN200 list every year since – often in the top
   ten – and continues to be the most successful                Following the start of their exports, between 1972 and
   agritech exporting company in New Zealand,                   1976, turnover doubled each year. By this time the fences
                                                                had around five or six orders of magnitude more energy,
   with revenues in excess of $300m in 2020.
                                                                and this increase allowed the company to start eyeing
                                                                                                                                   SIR WILLIAM GALLAGHER (KNZM, MBE, HonD.) CEO, Gallagher Group.
   For this inaugural NZ Agritech Insights Report,              up larger four-legged animals in the late seventies.
   it is fitting that we revisit the first time we              After spending $100m on physical palisade fence to keep
   profiled Sir William as a TIN Maverick, as he                elephants out of their palm oil plantations, only to have        Sir William has now worked in the company for 65 years,           His passion for the business is obvious, and it is this
   continues to be a leading voice of advocacy for              the fencing erode in monsoon season and be pushed over           leading it for more than 45. Today the company sells into         that has helped grow Gallagher Group from a small
   the sector and an inspiring example of success.              by the elephant’s Malaysia’s Federal Land Development            140 countries, and when not working, Sir William is travelling    ten-person company in 1962 when he joined, to a
                                                                Corporation was looking for a second option.                     around the world meeting suppliers and customers. The             global leader with more than 1000 staff today.
                                                                                                                                 word is he’s visited 174 countries in his life, so far.
                                                                “Someone there had read about our electric fencing,” Gallagher                                                                     His success in business also saw him knighted in 2010
Now famous, the tale of Joe the horse in the early              says, “and so they called us up. We did about 5,000km of         He may have the luxury of being able to travel and relax          and awarded an MBE in 1987 followed by a Companion
1930s was where Gallagher Group began.                          electric fencing for them and that really got it rolling.”       now, but says it was not always so.                               of New Zealand Order of Merit in 1998. He was also
Fed up with the horse scratching his rump on their Essex                                                                                                                                           awarded the prestigious Excellence in Communication
                                                                This introduction into wildlife and game management quickly      “We have our ups and downs, it’s not all great but we’re
car, William Gallagher senior decided to run a voltage                                                                                                                                             Leadership award in 1996 – the first time in its history
                                                                escalated with contracts in Sri Lanka, Kenya, South Africa,      like the duck – calm on top but paddling like hell underneath,”
across it so Joe would get a shock next time he tried                                                                                                                                              that it had been awarded outside of North America.
                                                                Africa, and Nairobi to name a few. Gallagher’s systems have      he laughs.
to scratch. Although they never saw it happen, one day                                                                                                                                             Gallagher’s best piece of advice? Go around with eyes
                                                                since developed further with smart technology allowing           When discussing good management, every point seems to be
the wire had been triggered and Joe the horse never                                                                                                                                                and ears open.
                                                                sensors along the fence line to check integrity of the fence,    pulled directly from the bible of business – good people, good
came near the car again. From this point on, Gallagher
                                                                from up to ten kilometers away. Gallagher says his next          leadership, delegation not abdication – to name a few of his      “Life is far too short to make all your own mistakes so
senior began his work making electric fences.
                                                                move into security for people in 1988, was a logical one.        principles. Getting good people is his number one key point.      learn from the others.”*
Born in Hamilton in 1941, Sir William Gallagher ( junior) was
the third child in a family of five. He always wanted to go     The company’s security systems have since been                   When asked about advice for aspiring business
into the family business – Gallagher Engineering – making       installed around the world, and are used in prisons,             leaders he says, “Stick to a specialty and become                 *This profile has been adapted from a Mavericks profile that originally
electric fences, top dressers, and other agricultural           border security, and politically important buildings.            number one at it, and then take it to the world.”                 appeared in the 2015 TIN Report, written by Holly Ryan.
machinery. Throughout the 1950s he worked holidays
and weekends doing odd jobs at the company.
“I basically had ten years coming through [before I joined
the business] so I was a fitter and turner, a welder, an
electrician – you name it, I had done it,” he says.
The development of the electric fence changed the
agricultural industry completely, allowing farmers to strip-
graze and better manage their stock. It took a few years
for the business to take off however, with William Gallagher
senior being seconded to work in the ammunitions
factory as a maintenance engineer during World War II.
In 1962, age 21 and having studied mechanical engineering
at Auckland University, Sir William Gallagher joined
his father’s company full-time. Ten years later when
his parents went to England for six months two years
in a row, he managed the company, and says this was
when he began to take over as managing director.

20   NZ Agritech Insights Report 2020                                                                                                                                                                                                                          Mavericks     21
Companies: Livestock                                                                                                               People:
Improvement Corporation                                                                                                            Emma Parsons, CEO of Agrigate
LIC IS A FARMER-OWNED AGRITECH AND HERD IMPROVEMENT COOPERATIVE THAT                                                               GROWING UP ON A DAIRY FARM IN PATEA, SOUTH TARANAKI, WITH A FATHER
PROVIDES A RANGE OF SERVICES AND SOLUTIONS TO IMPROVE THE PRODUCTIVITY AND                                                         WHO WAS AN ECOLOGIST AS WELL AS A HIGHLY TECHNICALLY SKILLED FARMER,
PROSPERITY OF PASTORAL DAIRY FARMERS. THIS INCLUDES DAIRY GENETICS, SAAS HERD                                                      EMMA PARSONS LEARNED A KEY LESSON THAT SHE HAS APPLIED IN BOTH HER
MANAGEMENT SOFTWARE, MILK TESTING, DNA PARENTAGE VERIFICATION, DIAGNOSTIC                                                          LIFE AND CAREER: THE IMPORTANCE OF THINKING HOLISTICALLY.
TESTING, FARM AUTOMATION, AND FARM ADVISORY SERVICES.

With origins dating back to 1909, Livestock Improvement                                                                            “Undoubtedly, my family and my home town have been my                solutions for the wider
Corporation (LIC) has a long history of providing                                                                                  greatest influences,” she says.                                      agritech sector – and it’s still
world-leading precision farming innovations for the                                                                                                                                                     very early days.”
                                                                                                                                   “Thanks to them, I developed a very practical, holistic
dairy industry. For the past 100 years, LIC has made
                                                                                                                                   approach to farm sustainability problems and the ways in             While growing the Agrigate
breakthroughs in genetics, reproduction, software, and
                                                                                                                                   which technology, in its broadest sense, helps and hinders           team from an initial three
automation. As a result, New Zealand herds have some
                                                                                                                                   those outcomes.”                                                     roles to thirteen over the
of the highest rates of genetic gain in the world.
                                                                                                                                                                                                        last three years, Emma has
                                                                                                                                   Emma has worked in the New Zealand dairy industry for nearly
LIC has ranked at sixth place on the TIN200 companies list                                                                                                                                              also managed to grow her
                                                                                                                                   two decades, beginning her career at Fonterra in the ingredients     own family of two children,
for several years, and was the top exporter in the Biotech
                                                                                                                                   sector of the business in 2002.                                      one of whom was born just
sector in 2019. This success has depended on LIC keeping
its global edge in pastoral dairy farming information by                                                                           In the years following, she took on a variety of company roles       four months before her
developing a ‘startup culture’ mindset, while broadening access                                                                    both in New Zealand and internationally including four years in      appointment to the CEO role.
to new data sets to meet future needs and challenges.                                                                              Latin America, all the while applying the same approach she had      “My family definitely sustains
                                                                                                                                   learned in South Taranaki to her work at the dairy giant.            me … while also depleting
The company has developed an export strategy to become                                                                                                                                                                                      EMMA PARSONS,
the leading supplier of semen for grass-fed pastoral dairy                                                                         On returning to New Zealand in 2010, Emma’s education in             me!” she jokes. “Having two         CEO, Agrigate
across the UK, Ireland, South Africa, and South America.                                                                           both environmental science and commerce aligned well for             small kids did mean those
                                                                       WAYNE MCNEE, Chief Executive, LIC                                                                                                early days at Agrigate were
All of LIC’s high value semen products are now exported,                                                                           her appointment to a new role responsible for setting up and
including sexed semen for the first time in 2020.                                                                                  managing Fonterra’s first ever sustainable dairying field team.      kind of blur, but I have an amazing, supportive partner and with a
                                                                                                                                                                                                        great team effort, we just made it happen.”
Described by CEO Wayne McNee as “the DNA of New Zealand’s            We are currently implementing state of the art genomics       The next seven years saw Emma move into increasingly senior
dairy industry”, LIC has played a key role in helping New Zealand                                                                  roles at Fonterra, driving the broader sustainability goals of the   Talking with Emma, one quickly gets the impression that her
                                                                     assessment tools at our laboratories in Hamilton, which
retain its spot as the leader in the global pastoral dairy system.                                                                 company and leading initiatives in responsible dairying.             career as a leader in the Kiwi tech sector has only just begun,
                                                                     will enable us to accelerate our research and offer new
                                                                                                                                                                                                        and that she still has much to accomplish.
                                                                     genomic testing services to farmers in New Zealand.           With such experience, her appointment to the role of CEO for
What have been the key factors that have                                                                                           Agrigate was a natural next step up.                                 “I want to continue to work to ensure that our farms are
                                                                     Like all sectors, the dairy industry needs to keep evolving
                                                                                                                                                                                                        sustainable and profitable, and that we can take that value to the
contributed to your company’s export success?                        to meet new challenges head-on and maximise new               “My holistic approach to farming means I see agritech more           world to create thriving communities back home. I’m also keen
                                                                     opportunities. That is why New Zealand’s farmers are          broadly than just apps and devices. For me it’s about systems,       to continue to support collaboration within the agritech eco-
“LIC’s export success has been driven by our innovation-led
growth strategy and our ongoing commitment to pushing the            sharpening their focus even more on improving cow             processes, practical tasks, simplification, and connectivity, and    system both in New Zealand and with our Australian neighbours.
technological boundaries to deliver genetic gain to our farmers.     productivity and efficiency, and why our innovation-led       my end-to-end view of the value chain is what I believe set me
                                                                     growth strategy – built off a global understanding of the     up well to lead Agrigate.”                                           “The sector has big challenges ahead, particularly with the
Information has been, and always will be, critical to what           factors driving change in global dairy markets, and here in                                                                        impacts of climate change, water scarcity and quality decline,
we do as an agritech co-op. LIC is continually focused                                                                             Agrigate is a joint venture of Fonterra Farm Source and              and understanding our dependence on ecological systems – and
                                                                     New Zealand – is helping keep farmers ahead of the game.”
on making its data work harder to drive better insights                                                                            Livestock Improvement Corporation (LIC). It was built around         agritech will play a critical role in addressing these challenges.”
to inform and evolve New Zealand’s dairy herds and                                                                                 the idea of harnessing the wealth of information that was being
                                                                     What are the main challenges your company                     generated by an increasing variety of data sources connected         Emma is also very clear about why she believes New Zealand is a
products and ensure we remain the best in the world.
                                                                                                                                                                                                        great place to grow an Agritech business.
                                                                     will face over the next 12 months?                            to Fonterra’s dairy network.
Farmers in our key export markets farm their cows on
                                                                                                                                   After what had been nearly a decade of development, the              “New Zealand farmers are highly engaged in farming as a
pasture, just like we do in New Zealand. As a leader in              “Over the next 12 months, one of our biggest challenges
                                                                                                                                   resulting tool aimed to enable farmers “to make faster and           business as well as a lifestyle – this means that we are a great
breeding dairy cows for grazing systems, LIC is proud to             will be continued uncertainty facing the global dairy
                                                                                                                                   smarter decisions on one, easy-to-use online dashboard”.             test ground for people who are willing to try new things, and I
provide these farmers with world-class genetics that enable          industry due to COVID-19, particularly if there are
                                                                                                                                                                                                        think that despite the increasing urban-rural divide, we have a
them to breed the best cows for their farming systems.”              disruptions to export markets or any issues with supply       “There was a lot of work to get Agrigate off the ground, and it      ‘grounded-ness’ to our approach. But we have a long way to go
                                                                     chain hold-ups for dairy products or our own exports.         was launched initially to great interest. We learned very quickly    in harnessing the diversity of our communities and channelling
What are the benefits of being based here                            Farmers are facing additional challenges with a lower         though that farmers wanted to be able to share data with each        that into our rural sector so we can grow the pie for all.”
                                                                                                                                   other rather than simply view a dashboard,” says Emma.
in New Zealand?                                                      milk price looming and increasing climate and other                                                                                So, what’s her advice for young entrepreneurs looking to
                                                                     environmental considerations, which means getting more        Under her guidance, the organisation dug deep into solving           develop new agritech in New Zealand?
“Being based in New Zealand means LIC can quickly                    efficiency from less cows is more critical than ever.         the problems that farmers wanted addressed, and pivoted the
develop, test, and commercialise products, such as our                                                                                                                                                  “Do everything you can to collaborate and find partners with
                                                                                                                                   business accordingly.
SPACE™ pasture management system. Our cooperative                    We’re delivering on our strategy by providing leading                                                                              whom you can work – and win. Focus on challenges that are
structure means that we are close to our customers,                  genetic options and management tools to enable                “Agrigate today is a very different business to where we started.    globally scalable, and leverage all the support, people and
who all contribute to innovation through data sharing                farmers to meet their environmental and animal                It’s now focused on the transfer of data between organisations       resources that our amazing New Zealand technology eco-
and through use of our herd improvement services.                    care requirements – now and into the future.”                 and data integration with partners, which is unlocking new           system has to offer.”

22   NZ Agritech Insights Report 2020                                                                                                                                                                                                                      Mavericks      23
Companies:
Bluelab
OPERATING FOR 30 YEARS, BLUELAB HAS BECOME KNOWN AS THE INDUSTRY
STANDARD FOR HIGH-PRECISION AND INNOVATIVE MEASUREMENT TECHNOLOGY.
THEIR AWARD-WINNING PRODUCTS MONITOR AND CONTROL THE FUNDAMENTAL
PARAMETERS OF GROWING SUCCESS – INCLUDING NUTRIENT, PH, MOISTURE, AND
TEMPERATURE – IN CONTROLLED ENVIRONMENT AGRICULTURE (CEA).

Following its first official appearance on the TIN200 list in
2017, Bluelab increased its revenue by $5.5m to $19.4m in
2019, earning its debut on the Absolute IT Supreme Scale-Ups
winners list in the TIN Report. This was fuelled by increased
production capabilities and sales within the USA. The company
was also acclaimed in that year with the NZ International
Business Award for Excellence in Innovation.
In June 2020, Bluelab launched its rebranding, revealing a
modern new look as well as a brand-new purpose: the art of
growing for a healthier world. One of Bluelab’s biggest goals
is to elevate the standard of growing through newly bolstered
education and innovation initiatives, ultimately bringing an end     GREG JARVIS, Chief Executive, Bluelab
to unsustainable growing practices.
When CEO Greg Jarvis purchased the company known as
                                                                   thinking and customer engagement, which enables us to
NZ Hydroponics in 2000, it wasn’t really a tech company. The

                                                                                                                                                 25
                                                                   shape our products around understanding customer problems,
business only sold one electronic product amidst its inventory
                                                                   and then helping them overcome them.”
of grower supplies, nutrients, and irrigation fittings.
Over the next four years, Jarvis divested the company of its
                                                                   What do you see are the benefits of being based
hydroponics offerings to focus on the technology opportunity
in electronic meters – and fittingly renamed the company           here in New Zealand?
Bluelab. Since then, the company has grown steadily to             “Being based in New Zealand enables us to develop great
become the industry standard for highly accurate and robust        relationships with growers to run trials for our products,
measurement tools.                                                 especially here in the Bay of Plenty. This close proximity means
                                                                   R&D is much more affordable.
What have been the key factors that have                           We’ve also found that being based in New Zealand makes us a
contributed to your company’s export success?                      desirable place for international talent, attracting some of the
                                                                   best minds from around the world. For example, every member
“The key factor has been people. Firstly, we built a team that

                                                                                                                                       The Eco-System
                                                                   of our software engineering team, is an immigrant – which
could help us realise our global ambitions, got people on the
                                                                   shows how that opportunity to come to New Zealand
ground in our target export markets, set up our first service
                                                                   is a real benefit for driving the company’s innovation forward.”
team in the US, and added sales staff in different states.
The next step was looking at where our innovation gaps were,
                                                                   What are the main challenges your company will
then putting a team in place that could develop our products
around that approach. Appointing Jono Jones as Chief               face over the next 12 months?
Product and Innovation Officer moves us forward in our design      “COVID-19 is obviously the greatest challenge, as it means
                                                                   we need to look at alternatives to traveling in person to
                                                                   international markets for sales and marketing. As it could be
                                                                   another year until we can even consider overseas, we are now
                                                                   building up our capabilities in doing virtual training, remote
                                                                   team meetings, and other things to maintain that all-important
                                                                   direct contact with people.
                                                                   At the same time, the cost savings that are apparent from
                                                                   not having to travel is creating new opportunities. We will be
                                                                   opening up more online channels, and participating in virtual
                                                                   trade shows to engage with potential customers. While it will
                                                                   definitely be a challenge, it will also be interesting to see how
                                                                   these new ways of doing business translate into quality leads.”                Photo courtesy of Bluelab.

24   NZ Agritech Insights Report 2020                                                                                                                                   25
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