NZ Fry Up: Agritech in Aotearoa doing OK; Lots for tech startups, less for IT skills; LIC sheds automation business

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Agritech in Aotearoa is doing OK

With the annual Fieldays agricultural show in Hamilton almost upon us, it’s a good time to reflect on the agritech sector. Of all the areas of tech, you might expect it to be the most vibrant in Aotearoa New Zealand, but data from the latest Technology Investment Network (TIN) investor guide shows it only represents a 10.5% share of the TIN200 (the top 200 New Zealand tech companies) in terms of revenue and a 6.8% share of revenue growth.

This may change with an infusion of new companies in the sector coupled with encouragement from government agencies such as the New Zealand Trade and Enterprise, sponsor of the Most Innovative Hi-Tech Agritech Solution at the Hi Tech Awards.

The four finalists in 2021’s agritech category represented a spread of offerings:

  • Halter allows farmers to virtually fence and physically shift their livestock using a solar-powered collar on each cow that sends data to and from a mobile application.
  • Hectre is a fruit-sizing system that uses AI technology to deliver data which is over 95% accurate.
  • Levno provides on-farm monitoring systems in a single integrated app.
  • Waybeyond uses AI technology to help farmers predict their crop yields.

By the way, Halter won the agritech award and also took out the Most Innovative Hi Tech Hardware Product at the Hi Tech Awards recently.

The TIN folk always see the glass half full, and in their investor guide they claim that agritech sector growth is promoted by “a strong primary industry including dairy, viticulture, and horticulture, large regional centres of innovation, and access to foreign markets.”

Lots for tech startups, less for IT skills

The TIN investor guide also notes that ease of starting a business, ease of doing business, getting credit, and not being corrupt are the four big advantages for new companies looking to conquer the tech scene from Aotearoa. You could also add an amazing amount of support on offer, with the list of organisations set up to help startups and scale-ups (growing companies past the startup phase) running to five pages in the guide.

There are six agencies from central government alone: Callaghan Innovation, NZTE, NZ Green Investment Finance, NZ Growth Capital Partners, and the Ministry of Business, Innovation, and Employment. They’ve also listed New Zealand Immigration, although many in the tech sector will be wondering how useful this agency is, considering a number of companies are crying out for IT skills from abroad.

Industry association NZ Tech CEO Graeme Muller says that the tech sector needs skilled workers, and immigration is a viable solution, but organisations are experiencing an “inability to bring new staff into the country.” He says, “NZTech is deeply concerned that if this trend continues for too long, Aotearoa’s largest digital firms will be forced to build up their offshore teams and we will see a decreasing New Zealand tech footprint.”

Earlier this year, Muller told NZ Tech members he’d heard of companies looking to create their own MIQ quarantine facilities to enable tech talent to immigrate.

With a median salary of $80,000, these are good roles for New Zealanders as well, but it appears that despite the many years of promoting IT skills, there still isn’t enough local talent to fill the gaps.

A NZTech survey of 190 employers shows that collectively they will require 5,000 newly digitally skilled employees in the next two years, but if the IT sector has its way many of these job vacancies would be filled by overseas workers. In 2019, before the pandemic struck, there were 3,683 visas approved for IT professionals to immigrate to New Zealand.

LIC sheds automation business

Meanwhile, one of NZ agritech’s leading lights—Livestock Improvement Corporation (LIC)—is shedding its automation product portfolio, selling out to US-based MSD Animal Health, a division of Merck & Co., for a cool $38 million.

LIC has apparently struggled to make its automation products pay, and it was a case of ramp up investment in the portfolio or sell it off, as chair Murray King explains:

We know automation delivers a lot of value on-farm, but despite significant efforts by our people, the automation business itself has seldom been profitable, partly due to the stabilisation of cow numbers in NZ dairy and limited traction in international markets.

This divestment will allow us to focus on delivering value for our farmer shareholders—with the increased capital it will provide and, importantly, ongoing access to key data from the automation and sensor technology to support core LIC business into the future.

While MSD Animal Health is based in New Jersey, its business unit Allflex Livestock Intelligence has manufacturing facilities in Palmerston North. The LIC Automation team have been offered secondment to MSD Animal Health, to continue in their current roles.

Copyright © 2021 IDG Communications, Inc.

 
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