Background to the Role

The National Institute of Water and Atmospheric Research (NIWA) is a Crown Research Institute established to undertake scientific research initiatives which have the

potential to enhance the economic value and sustainable management of New Zealand's aquatic resources and to provide a better understanding of climate and the atmosphere conditions.

One of NIWA's key areas of focus is the sustainable management of New Zealand's fisheries and enhancing the economic value derived from these assets. As part of this research, NIWA undertook a project to develop the technology required to commercially farm hapuka; a species of fish which previously did not suit traditional aquaculture models.

The Business Need

NIWA had made a significant investment to develop the processes and technologies necessary to commercially farm hapuka, including developing a pilot facility to hatch hapuka fingerlings and growing these to 3kg fish in both land and marine based production cages. The farmed hapuka was successfully market tested with restaurants in

New Zealand, Australia, South East Asia, the United States and the United Kingdom.

Given the success of this pilot programme, NIWA needed to determine the commercial viability of establishing a commercial hapuka farm in partnership with private sector investors. NIWA engaged Cranleigh to assess the commercial viability of the hapuka proposition and the market's appetite for an investment in this sector.

Cranleigh Solution

The Cranleigh approach to the evaluation of the hapuka proposition was two-staged. Firstly we undertook a comprehensive and robust evaluation of the commercial proposition, which included undertaking a detailed review of NIWA's initial financial model and implementing our recommendations to develop it into a demand driven

'paddock to plate' financial model.

Secondly, we engaged with key industry participants and potential investors to evaluate the appetite for investment in a commercial hapuka farm and to obtain market

feedback on the value proposition.

As a result of this process, Cranleigh was able to evaluate the commercial viability of the hapkua programme. Our comprehensive analysis of the hapuka model identified

key weaknesses in the commercial proposition, including issues concerning hatchery costs and fingerling yield and our updated financial model was able to demonstrate that these key sensitivities would have dramatic impact on projected profitability. At the same time, we were able to establish that there was strong interest from industry investors. Based on our recommendations, NIWA made the decision to continue the commercialisation of the hapuka project.