CONNECT – INTERACT, INSPIRE, INNOVATE

SISTER CITY RELATIONSHIPS THAT PROVIDE AN ECONCOMIC RETURN

• Palm Desert, California, USA : 1981 • 蒲郡市 – Gamagōri, Japan : July

1996 • – 文昌 Wénchāng, China : January

2011

How do we assess Value?

In our Sister City relationships we assess value as:The summation of all positive effects upon the region’s economy.

Relationship value is ‘perceptual in nature’ and we acknowledge that relationship benefits are often future oriented

Conceptualising Business to Business Relationship Value

Sergio Biggemann & Francis ButtleMacquarie Graduate School of Management, Australia

Only two hours from the Los Angeles area, Palm Desert is a city in Riverside County, California, United States, in the Coachella Valley, approximately 11 miles (18 km) east of Palm Springs. The population was 48,445 at the 2010 census.

PALM DESERT, CALIFORNIA, USA – Knowledge Exchange

Problem:• A natural building development incl.

alternative energy systems• Limited local expertise• No budget for consultantsSolution:• Palm Desert had expertise• Link to Expert who was visiting NZ

privately• Professional Development of Council

staff, local Trades & Residents

Council Outcomes –- Changed mindsets- Skilled people – technical /

professional skills development- Enhancing organisational

performance- Council staff, trades and public,

participated together in the Knowledge Forum so all working from same knowledge platform

- Increased willingness to engage in future knowledge exchange activities

Societal Benefits –- Access to innovative ideas and expertise that

supports environmental sustainability and resilience- New Technology, Innovation and Skills- Public health and quality of life

Economic Outcome –• Significant transfer of information at no cost• Trades with knowledge to support business growth in

alternative house building / technology usage• Residential

– lower house construction cost– operational costs reduced e.g. heating, energy, water, waste

We acknowledge that economic outcomes from this exchange will be achieved through many different channels and mechanisms and deliver benefits over varying timescales

Other areas of knowledge exchange have been:

• From Gisborne:– Marae Justice – Maori Youth Court– Restorative Justice - Family / Whanau Group

Counselling– Emergency Management

• From Palm Desert – Kerbside Recycling

Relationship Value –– Personal– Financial– Knowledge

蒲郡市 Gamagōri, JAPAN - Wood

•Gamagōri

Gamagōri is situated on the coast of Mikawa Bay on the Pacific Ocean in southeastern Aichi Prefecture. In February 2011 the city had an estimated population of 81,767.

• In 1990 Japanese companies Juken Sangyo and Nissho Iwai formed a company called Juken Nissho with the aim of growing tree and establishing a processing facility in Gisborne. Mr Nakamoto headed this company.

They spent $43 million to buy two Gisborne radiata pine forests and currently own 16,000 hectares of forests in Gisborne

• February 1994 Juken NZ opened its East Coast timber processing mill in Gisborne

• Products –– Triboard, Strandboard, MDF,

Plywood, Laminated Veneer, Solid Wood

Regional Economic Benefits

• Over the last 11 months 1.5 tonnes of Logs and 24,000 tonnes of Plywood were exported from Port Eastland

• The log yards account for much of the 12 hectares the port rests on 

• 60 people employed at the port - up to 100 at

busy times of the year

• JNZ forest and mill employ around 560 people on a full-time basis.

• According to the Ministry of Agriculture and Forestry figures, the multiplier effect to assess related community jobs created by this industry is around three — the JNZ operation therefore creates around 1680 jobs within the East Coast community.

• With mill and forest expansion, the total capital invested in Gisborne would be more than $400 million.

• The East Coast mill’s market is now worldwide. Juken NZ has its own marketing arm selling to Australia, Dubai, China, Europe, the Philippines and the United States.

Relationship Value –– Personal– Financial– Knowledge– Strategic

– 文昌 Wénchāng, CHINA - Wine

• Wénchāng

Wénchang is a county-level city located in the north east of Hainan province, China. It was promoted from a county to a city on November 7, 1995, and had an estimated population of 115,000 in 2006. It is 63 km southeast of the capital, Haikou.

• Well known for producing the first New Zealand wine to be imported in commercial quantities into the UK, Nick Nobilo, majority owner of Vinoptima Estate, is finding success in the Chinese market.

• Nick’s 2011 entry into the Chinese market was made possible through a fortuitous meeting with a Chinese couple who tried his award winning Gewürztraminer at a 2009 wine show. The couple turned out to be the owners of a well connected Guangzhou trading firm, through which Vinoptima Estate now distributes their wine product in China - Guangzhou, Hong Kong and Hainan Island (Wénchāng).

Economic Outcomes for NZ

• Sales of New Zealand wine to China have increased substantially in recent years as winemakers have sought new markets to absorb the current level of production and as the size of that potentially huge market grows rapidly.

• White wine makes up over 40% of the wine New Zealand sells to China

• In 2011 New Zealand’s wine sales to China shot up from $6 million to $17 million

• In 2011 Wénchāng Hoi Tin Garden Restaurant –purchased 26,000 bottles of Vinoptima Gewürztraminer worth around US$500,000.

• A flagship wine of the restaurant on the menu at approx NZ$250 per bottle.

• Ongoing orders placed

Relationship Value –– Personal– Financial– Knowledge– Strategic

Economic Outcomes for Vinoptima Estate

Future for Chinese Wine Sales• Vinoptima participated in the New

Zealand Seafood and Wine Event in Shanghai on March 21, 2012 hosted by Hon Tim Groser, Minister of Trade

• Since 1 January 2012 duty on New Zealand wine sales to China has been completely phased out. According to NZ Winegrowers, this means “a bottle of New Zealand wine has a 15-18% price advantage in real terms.

Importance of Markets to NZ

Value of Export Markets to New Zealand

3.3 3.4

4.8

4.1

3.13.5

5.6

3.43.9

0

1

2

3

4

5

6

China Japan USA

$ (b

illio

ns)

2009

2010

2011

People to People Connection

Nick Nobilo has stated:"I think it's important to understand

that in China you have to build the trust first with the people you deal with and they have to have confidence in your credibility, and you in them, and then once you've done that then you get down to the business."

CONNECTING, INTERACTING, INSPIRING AND INNOVATING

THE PEOPLE TO PEOPLE

CONNECTION