Westpac NZ Becomes First Bank to Accept Zespri Shares as Lending Security
Westpac NZ has become the first New Zealand bank to receive approval from the Reserve Bank of New Zealand (RBNZ) to secure and leverage kiwifruit growers' Zespri shares.
The bill is a step towards a Free Trade Agreement (FTA) with the country.
Ratification of the FTA this year would mean a 33% reduction in tariffs on exports of New Zealand kiwifruit to South Korea for next year's kiwifruit season. During 2014, Zespri growers paid approximately $22 million in tariffs, with the rate set at 45%. The tariff for kiwifruit will reduce to zero over the next five years.
Zespri chief executive, Lain Jager, says, "For Zespri, the elimination of the tariff means that we will be able to offer more competitive pricing to Korean consumers and therefore maintain a competitive position in the market as well as providing greater returns to New Zealand kiwifruit growers. This is a fantastic outcome for the industry and will ensure that South Korea remains a priority market for Zespri." Zespri is projecting annual sales volume growth in Korea of over 10% during the next five years.
Jager adds, "We now look forward to further progress by the government on other trade initiatives, particularly the Trans-Pacific Partnership. A high quality, comprehensive agreement among 12 Asia Pacific nations that eliminates tariffs will generate significant value for the New Zealand kiwifruit industry, with our tariff payment in our largest market Japan alone being around $16 million in 2014."
About Zespri in South Korea
· South Korea is Zespri's seventh-largest market in the world.
· Zespri is expecting sales volume growth in South Korea of over 10% a year during the next five years.
· Zespri has also invested in developing kiwifruit production in South Korea and has over 100 hectares of producing kiwifruit orchards supporting its 12-month supply to key markets.
· The current tariff rate for import of kiwifruit into South Korea from New Zealand is 45%.
