Last week at the invitation of Prime Minister Bill English, I travelled with a small New Zealand contingent from the primary industries sector on a trade mission to Japan. The focus of the visit was on business opportunities through a range of meetings in Tokyo and Sapporo in Japan’s northern island of Hokkaido. For the business meetings I was mainly aligned with the energy sector representatives from New Zealand that included Dr Mike Allen, Executive Director of Geothermal New Zealand and Ian Simpson, Chief Executive of GNS Science.
Japan is extracting itself away from nuclear and coal fired power generation with a significant move towards renewable energy focusing on geothermal and bio-fuel (wood pellets) electricity generation. We met with senior managers and engineers from Japan Oil, Gas and Metals National Corporation (JOMEC) in Tokyo and the Bureau of Industrial Promotion Office of Environment and Energy in Sapporo where Mike Allen gave a presentation on geothermal energy production in New Zealand that included areas where New Zealand could be of assistance to Japan in developing modern geothermal generation opportunities.
For my part the focus was on the possibility of large scale wood pellet imports to Japan from New Zealand. Currently Japan is importing around 700,000 tonne of wood pellets, primarily from USA, and they forecast this to rise to 2.3 million tonne as a minimum by 2021 but have aspirations of taking this up to a maximum of 3.9 million tonne by 2021. Clearly there is the potential for a New Zealand business to enter into large scale production of wood pellets to support Japan’s future electricity generation requirements. This could present itself as a regional opportunity for the likes of the East Coast/Gisborne region where a lot of low grade wood from logging operations is left in the forest. During our meetings we were advised that Japan is landing wood pellets from USA into Japan for around 24 yen/kg which equates to around NZ$330/tonne at current exchange rates. Whether any large scale New Zealand producer can make it work at this price would need to be investigated through due diligence.
One of the highlights of the trade mission was having dinner at the Japanese Prime Minister’s official residence in Tokyo where each of us on the trade mission was personally introduced to Japan’s Prime Minister Abe by Prime Minister Bill English. The dinner was also attended by senior business leaders from Japan and also included Jamie Joseph the ex Highlanders rugby coach who is now the coach for Japan. A further highlight was the networking opportunity with other senior New Zealand business leaders where we could discuss matters of common interest such as trade barriers. It was particularly useful for me to have those discussions with the Chairman of Fonterra.
Chair of WPMA