Many New Zealand SMEs have excellent, innovative food and beverage products. These products are often well received in their markets and have significant growth opportunities. To take advantage of these opportunities they need to grow capacity and enter into new markets with all the challenges that entails. Inevitably a new country market entry will involve quite different and complex regulatory frameworks for the import of food and beverage products from New Zealand.
Expert decision-making is required on the all-important key issues around sales, marketing and distribution, the outcome of which will determine the viability of the business going forward in that new market. This is a difficult area for New Zealand SMEs and is fraught with business perils for the inexperienced. AGRIFOODNZ has a solution to manage these risks in the Chinese market.
SMEs usually require additional investment to grow their businesses, however their preference is to ensure that any new investment does not result in them losing control.
The solution offered by AGRIFOODNZ is for the Fund to take a minority investment stake in the SME, providing the SME with the additional capital to fund expanded capacity and entry into China. It also enables the SME to utilise the expertise of the AGRIFOODNZ team as experienced China traders to add branded value to the business. In practice, this result is achieved by the Fund taking up a directorship on the SME board and through AGRIFOODNZ adding value at an operational level in many practical ways. In exchange, the Fund seeks from the SME the opportunity to market its food and beverage products in China.
The Fund, once subscribed, is intended to work with a range of entrepreneurial New Zealanders to grow their companies and lift the exports from New Zealand of added-value products.