R&D News & Views – February 2007

Welcome to” R&D News & Views" in which we will keep you updated with news about business, science and technology.

Contents

• Catalyst “new look”
• Changes at Catalyst
• CRI’s - how are they going?
• Energy Workshop
• Conferences

Catalyst “new look”

As you may have noticed from the new logo, we have invested in a business update. As well as the new graphics we are now offering a wider range of services to help you build your R&D. These are on the new look web site. Other new additions include some case studies of successful innovations we have done with clients and a checklist to see if you are ready to undertake a significant development project. We invite you to visit the site. We would welcome any comment on both the “new look” and the services offered.

Changes at Catalyst

Along with the change to our services offered and website we have had a small re-arrangement of people. Malcolm is now based in Wellington region and has an office in Wellington. Malcolm can still be contacted on his mobile or on 04 472 3021. Malcolm will be in the Bay of Plenty/Waikato area regularly and Wymond Symes and Justin Ford-Robertson are still based in the BOP, and Jane covers the South Island from Christchurch.

When you are through Wellington please get in touch and drop in for a coffee.

CRI’s - how are they going?

We follow the ups and downs of the CRIs keenly as they are an important part of New Zealand’s innovation system and many of you require CRI services at some time in your business. So their success matters to all of us.

Financial Performance

The nine CRIs have total assets of $481.4 million and employ 4,166 staff, of whom 3,360 are engaged in research and research support. In December 2005 we gave an overview of their financial performance and we provide an update for 2005/2006. You can obtain information for individual CRI’s here. The following table gives a summary of CRI financial performance (data from CCMAU and Statistics New Zealand)

	Revenue for 2005/06	Change from 2004/05	Net profit after tax (NPAT)($ m)	Return on equity
AgResearch	$120.7m	- 6.90%	13.5	14.7%
NIWA	$106.0m	+ 16.80%	10.3	24.4%
IRL	$73.8m	+ 22.7%	- 1.6	- 6.4%
Hort Research	$62.0m	+ 5.4%	0.3	0.6%
Crop & Food Research	$53.5m	+ 13.5%	- 1.5	- 6.8%
Landcare Research	$51.6m	+ 7.7%	0.6	2.8%
GNS Science	$45.9m	+ 7.0%	1.0	6.1%
ESR	$45.2m	+ 11.7%	2.6	11.5%
Scion	$21.3m	- 38.8%	- 1.6	- 6.9%

• The overall CRI surplus after taxation was $18.8 million up from $13.3 million in the previous June year.
• Total operating expenditure rose by $36.8 million (6.9%) to reach $569.4 million, up from $532.6 million in the previous June year.
• Government revenue received by CRIs increased by $12.4 million (4.6%) to $283.6 million.
• Non-government sales revenue received by CRIs increased by $3.9 million (1.5%) to $267.7 million.
• Six CRIs reported net profits after tax (NPAT), while three reported net losses. IRL recorded the largest net loss of $1.6 million, with Crop & Food Research and Scion both recording net losses of $1.5 million.
• The average return on equity (RoE) across the CRI’ s for 2004/05 was 4.4%, which represents an improvement from the 2004/05 result of 1.5%. This result, however, was still significantly short of the 9.0% RoE target. NIWA recorded the largest RoE of 24.4%, while Scion recorded the lowest RoE of -6.9%. In the previous year, IRL recorded the recorded the lowest RoE, with a return of -20.3%

Non-financial performance

The CRIs face a variety of expectations. Besides financial viability, the CRIs are required to undertake research for the benefit of New Zealand. They are also required to report on their achievement of this objective. For 2005/06 this included:

• 1,558 papers in international, externally refereed journals, series or books,
• 2,824 papers in local, internally or editor refereed journals, series or books, plus research monographs, conference papers or books,
• 692 industry seminars, field days, workshops,
• 1,875 Technology New Zealand contracts or client reports,
• 50 licenses, and
• 38 patents or plant variety rights.

Commercialisation

As our clients are predominantly concerned with commercial outcomes it is useful to consider the shareholders expectations as laid out in the 2007 Operating Framework.

“CRIs are expected to bring an increased focus on New Zealand benefit to their commercialisation activities through developing commercialisation models that reward CRIs for their risk-taking, while ensuring that significant ongoing economic, environmental and societal benefit is delivered to New Zealand. The following criteria should guide all CRI technology transfer activities. CRIs should:

• Partner effectively with industry as early as possible
• Maximise wider benefits to New Zealand
• Aim to ensure ongoing earnings to New Zealand
• Aim to anchor within New Zealand any technology transferred
• Consider wholly owned subsidiaries where industry partners are not immediately available, with a view to seeking such partnerships downstream as the business consolidates.”

Energy Workshop

Justin Ford-Robertson recently organised a workshop on renewable energy in Torere in Eastern Bay of Plenty. Over 30 people attended the workshop, including participants from all around Bay of Plenty and the East Coast, and the feedback has been excellent. The focus was on energy demands and supply options for individual houses and small businesses, particularly those in rural locations where power supply might be an issue.

Participants viewed one domestic system using wind and solar power and wood heating (space and water), and discussed aspects including grid connections, system components, costs and efficiencies. They also went through an evaluation process at another property that has micro-hydro, solar and wind options to compare the cost-effectiveness of each.

As a result, at least two properties intend to install micro-hydro, and two marae are keen to proceed with further evaluations. Some sustainable tourism operators are also interested in pursuing renewable energy options, and have expressed an interest in visiting a micro-hydro operating on Justin's property near Opotiki.

Please contact Justin if you would like to follow up on interest in this area.

Conferences

You may like to get some new ideas and networks at one of the many conferences on offer over 2007. Those we know about are:

• 2007 Natural Products Summit is being held in Nelson on Thursday 22 February 2007 www.naturalproductsnz.org
• NZBio Conference 2007, Imaginative Partnering – Innovative Science. Auckland 12-14 March 2007. www.nzbio.org.nz/conference2007
• NZ Institute of Food Science and Technology Conference NZIFST Conference 2007 Conference Title: "FOOD - the challenges" June 19th-21st, 2007 (www.nzifst.org.nz)
• NZ Nursery and Garden Industry Association Conference - Joint NGIA and LIANZ 2007. 2007 marks the first ever Joint Conference between NGIA and LIANZ (Landscape Industry Association of New Zealand). Nelson 21st - 23rd June 2007 (www.ngia.co.nz)
• NZ Institute of Agricultural and Horticultural Science Convention 22-24 June 2007 - Lincoln University (www.agscience.org.nz)
• Horticulture New Zealand Conference July 30-August 1 2007 at Christchurch Convention Centre. (www.hortnz.co.nz)
• Queenstown Molecular Biology Meeting Queenstown - August 28-31st Theme: Food, Health and Gene Regulation(www.qmb.org.nz)
• The Institute of Foresters of Australia will host the joint Australian and New Zealand Institute of Forestry conference “Growing Forest Values”. The conference will be held at Coffs Harbour, NSW, Australia, from 3 – 7 June, 2007. www.forestry.org.au
• Forest-TECH 2007, Tools & Technologies to Improve Forest Planning & Operations. 13-15 March 2007, Rotorua. (www.innovatek.co.nz)
• SF - World Seed Congress 2007, 19 - 23 May 2007 Christchurch Convention Centre (www.worldseed2007.com)
• Seafood Industry Conference 22 – 23 May, 2007 in Wellington. (www.seafood.co.nz/conference)
• ASB Agribusiness Conference 2007 will be held in Queenstown from Sunday 20 May to Wednesday 23 May (www.agribusinessconference.co.nz)
• The Parliamentary Commissioner for the Environment is celebrating its first 20 years. The keynote event for the year is the PCE20 Forum in Wellington on 1 & 2 March. (www.pce.govt.nz)