With its cool climate, flat land, plentiful groundwater and proximity to major electricity supplies, it is also the ideal location for a new kind of harvest — data.
The $3.5 billion Datagrid New Zealand data centre just north of Invercargill at Makarewa is just what the city and region have been looking for for many years.
The uncertainties around the future of the aluminium smelter at Tiwai Point, due to its long-term power deal with Meridian Energy and overseas market fluctuations, have brought home the importance of securing another major player to not just support but boost the regional economy.
News of the approval of resource consent for the data centre has been widely welcomed across the South and throughout New Zealand. There is also much excitement about the laying of a new high-speed internet cable between Australia and Oreti Beach.
Details of how information processed by the data centre will be used and specifically who by remain hazy. But technology specialist Mark Laurence, who runs an artificial-intelligence advisory and training company, told RNZ he believed output from the new centre would be sent offshore through the cable to overseas customers.
He wants the government to get a commitment from the owners that Kiwis can use and benefit from the information being generated by the "AI factory".
While nobody could doubt AI is here to stay, like it or not, and that it will be good for New Zealand to have skin in the game, the ongoing benefits to Southland from the centre are not particularly clear — even if the new undersea cable is of more obvious, long-term advantage.
Everyone will be pleased about the initial sugar hit for the South of more than 1200 skilled workers involved in constructing the 78,000sq m centre. The Southland Business Chamber estimates that phase will inject about $4b into the economy, followed by hundreds of millions of dollars each year in data exports.
A permanent workforce of around 50 once it is fully operational is not to be sneezed at, even if it nowhere near the 750 or so employed by the smelter.
While that’s good for skiting up how significant this venture will be for New Zealand, the practicalities of keeping its lights on are substantial.
However, Transpower is confident there will enough electricity to go around, given more than 1000MW of renewable wind and solar projects are on the cards.
Without those, and with the smelter’s power contract running until the end of 2044, any squeeze could end up hitting Kiwis in the pocket.
Not a great look
When it comes to the resignation of Fonterra chief executive Miles Hurrell, it seems he is doing what New Zealand First leader Winston Peters predicted last year — heading out the door now he’s sold off long-standing New Zealand dairy brands to France.
Mr Peters’ "I told you so" message on news of Mr Hurrell’s resignation came with concerns about the size of his final pay packet. Mr Peters pointed out when Theo Spierings resigned in 2018 he took a $4.67 million bonus with him, on top of a salary of $43m in seven years.
The board says Mr Hurrell has displayed "courageous leadership" and set Fonterra up well for the future with a strategic reset. Mr Hurrell says the time is right for him to leave, for the dairy co-op and personally.
Few people really believe those celebrated Kiwi brands such as Anchor, Mainland and Kāpiti will stay in the hands of Lactalis for longer than the six to 10-year initial terms agreed. The deal, due to be paid next month, is worth $4.2b and the estimated average payout per Fonterra farm is between $360,000 and $400,000.
The loss of those brands comes as Heinz Wattie’s proposes ending its production of frozen vegetables, on top of cuts to its canned local fruit and vegetable offerings in the face of cheap overseas imports.
It all leaves a pretty sour taste in the mouth.
