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An agribusiness leader in the heart of Canterbury’s farming country says a lack of what he calls “patient” capital investment is stopping New Zealand’s emerging food and fibre sectors, like hemp fibre, from reaching their full potential.
Over the past 50 years, the Carr family has established a raft of rural businesses, including Carrfields and Carrtura, spanning seeds, livestock, rural contracting, machinery and rural finance from its Mid Canterbury base.
Craig Carr was managing director of the Carr Group, a large vertically-integrated agriculture firm with nine sites nationwide.
Speaking at the Seed and Grain New Zealand conference in Christchurch earlier this month, Carr said New Zealand food and fibre needed to move towards more high-value sectors over commodity production.
He said capital needed to support these projects in being profitable and enduring, so investors had to be “patient”, which was a challenge.
“If we’re going to build new value chains, we’re going to build new products and new export markets and new jobs and new industries, it’s actually very challenging,” he told event attendees.
“One of the biggest challenges has been around capital, finding capital that’s patient enough to actually allow businesses to get to their full potential.”
Carr was also involved with developing and now expanding a hemp processing facility in Mid Canterbury.
Developing a local hemp fibre value chain
Since 2018, Carrfields — alongside Hemp NZ and Rubisco, formerly New Zealand Natural Fibres — had worked to establish a hemp fibre value chain out of the crop’s hotspot of Ashburton.
The supply chain would begin at seed, then cultivation, harvest and production, with its visionaries seeing promise in products like hemp fibre-based textiles, acoustic materials, flooring and biocomposites.
The factory project made headlines last year, when Delaware-based firm Inside Out LLC — founded by Suzy Amis Cameron, wife of director James Cameron — received government approval through the Overseas Investment Office to invest in the joint venture.
However, Carr said Inside Out could not complete the investment.
“It’s been a journey,” he said. “Inside Out were engaged to invest, but they pulled out.
“They couldn’t complete the investment last year, which means it’s delayed some of our stuff.”
Inside Out LLC and Amis Cameron were approached for comment, but Carr said fortunately Te Rūnanga o Arowhenua came on as a local iwi investor earlier this year.
“To be honest, it’s been quite positive, because we’ve bought an a local iwi investor, which is fantastic,” he said. “We’re still in the process of raising $12 million at the moment for further expansion.
“It’s going well, but it needs capital to continue to invest to take it to that next stage.”
Iwi investor backs developing fibre ecosystem
A spokesperson for Te Rūnanga o Arowhenua said its investment was about supporting opportunities that aligned economic development with kaitiakitanga and intergenerational outcomes.
“Historically, much of the value from New Zealand’s natural fibres has been captured through commodity supply chains, with raw materials processed offshore,” they said.
“The opportunity is to capture more of that value here, build manufacturing capability in our regions and create an industry where the benefits are shared across the supply chain.”
They said the long-term ambition was to help develop industries that combined agriculture, innovation and manufacturing, based around traceability, fibre quality, provenance and end-market requirements.
“The investment is a long-term strategic commitment, with Arowhenua looking to support the continued development and expansion of Rubisco’s manufacturing capability and the wider natural fibre ecosystem over time.
“The investment reflects Arowhenua’s commitment to intergenerational economic development, sustainable land use, regional employment and innovation, while supporting opportunities to create greater value from our natural resources.”
The Arowhenua Native Nursery and Restoration also used wool and hemp mats, and was working with Rubisco to soon launch a hemp cultivation trial in South Canterbury.
Transforming NZ’s ‘dying’ textile industry
Carr said it envisioned a fibre innovation hub for the future, but needed to encourage a pathway to get young people into future materials industries, like hemp.
“We’re working really hard around how do we bring together that industry, because unfortunately, the textile industry in New Zealand is dying,” he said.
“We need to make sure we maintain that skill level, because we are losing so many people to retirement and we’re not doing enough to bring them in.
“We’ve got to really think about where we can take fibre to, not just wool, but plant fibres… many other things we can start thinking about, if we want to transform the industry.”
Carr said capital enabled growth, but did not always mean things could be accelerated as quickly as possible.
“When you’re dealing in building products and dealing in value industry changes, it takes time,” he said.
“We’ve actually built a much stronger pathway over the last few years to that capital now.”
Last October, the company established Carrtura to attract passive investment in subsidiary companies.
