Speech at the opening of the Zealong Centre

Thank you for inviting me to the launch of Zealong Tea. I acknowledge Tzewan Chen and Vincent Chen, whose vision we are celebrating. I would also like to acknowledge the Mayor of Hamilton, Bob Simcock; the Mayor of Waikato, Peter Harris; the Chair of the Waikato Regional Council, Peter Buckley; and my Caucus colleagues Lindsay Tisch and David Bennett.

The story of Zealong Tea is an inspiration to the Waikato and New Zealand. For 13 years, Vincent Chen has been cultivating and developing Zealong, to the point we are at today. This has required tremendous investment in the local economy, and a real dedication to defining what Zealong's brand will be.

I will start by describing the economic opportunity that the Zealong Centre will create. Then I will talk about the Government's plans for improving economic growth, and why Zealong is an example to New Zealand.

Most New Zealanders would tell you to be sceptical about someone who is trying to sell tea to China. The Chen family knows that Asia is actually a tremendous opportunity, even for tea. By focusing on a premium tea, oolong, they are immediately targeting the high-value end of the market. Because Chinese customers are becoming more affluent, the market for premium products is growing.

The Chen family also recognises the importance of tea in Chinese culture. Tea is part of doing business in all of Asia, and is a precious cultural gift. It has a status that goes beyond being a commodity.

The status of Zealong tea is enhanced just by being from New Zealand. As a country, we have a brand. Zealong tea will be produced in a way that uses and enhances this brand. Tea will be grown and maintained using natural fertilisers and organic sprays. Customers can trust that the product they purchase will be pure.

Zealong will also be produced using traditional methods, especially harvesting and processing. Because the Chens understand their market, they can link the production of Zealong to create a powerful brand.

I see that over the next five years, Zealong will increase staff by nearly 100 employees. You estimate your revenue will increase nearly four-fold to $72 million. These projections are based on understanding the market potential of Zealong.

The story of Zealong tea is a case study for developing the New Zealand economy. New Zealand has a justifiably proud record as a food producer, and here, we are in the heart of the most productive region in the country. Our ability to generate wealth from our environment and climate, and the application of science to agriculture, is world-leading.

Our economy as a whole has fallen behind that of other OECD countries. This Government has a specific target of closing the GDP gap with Australia, because accomplishing that would add significantly to New Zealand's productivity and wealth.

To do this, we need to move our economy further up the value chain. High-value goods, such as oolong tea, tap into a high-value sector of global markets. We can only develop these high-value goods if we are innovative, and Waikato is certainly an innovative region.

We also need to foster a new culture in New Zealand firms. This is particularly applicable to firms that are trying to develop export markets.

China is rapidly becoming New Zealand's most important trading partner. Our recent emergence from recession was due to demand from China. Our free trade agreement opens the door to New Zealand businesses wanting to access this source of wealth.

New Zealand companies need to build a deep understanding of China and the opportunity it presents. This means building long-term relationships with a culture that values relationships. Zealong has relationships because they understand the difference in cultures, and they know what Asian customers want.

Another strategy that New Zealand business must adopt as we accelerate our economy is to grow our talent. We can continue to use our classic "she'll be right" attitude, but we need to recognise that this sometimes holds us back. Sometimes, New Zealand business needs specialists and expert training to take our companies to the next level.

Zealong's commitment to using high-quality specialists to train their workforce is an example of the approach we need to adopt. Using specialists means we create a more highly skilled workforce, which sustains the benefits of innovation and makes New Zealand workers more productive.

The last strategy I want to mention is growing our brand. New Zealand is increasingly recognised for the 100% Pure brand. The Government has put a lot of resources into developing and marketing this brand, and it has had a tremendous effect on the tourism industry. New Zealand business now needs to take ownership of this brand.

This means more than using 100% Pure. This means our businesses need to show a serious commitment. One of the reasons that we kept agriculture in the Emissions Trading Scheme was because New Zealand needs to show overseas consumers - our customers - that we take greenhouse gas emissions seriously. It may not be the most convenient stance for our producers, but our customers will demand it.

Zealong is both an inspiration to the local and national economy, and an example of the change that New Zealand needs to make to boost our economic growth. You represent the innovative business future of our country. I look forward to hearing more about your exploits.

I declare the Zealong Centre open and wish you well for continued success.