Development West Coast reports annual loss of $1m

Wednesday, 31 August 2016

14012016 News Photo - Derek Flynn/Fairfax NZ.Wairau Valley farmer Evan White is milking three times every two days. Generic - south island farming - dairy cows .

Development West Coast (DWC) and its subsidiaries have posted a loss $1 million amid controversial investments and larger community grants.

The charitable trust released its annual report on Tuesday at a public meeting in Hokitika, revealing it doubled its loans to businesses over the last year.

DWC was set up as a charitable trust in 2001 to manage a $92m compensation package from the Government, in part to offset the end of indigenous timber logging.

A $880,000 investment in Putake Honey sparked controversy amongst some West Coasters because the Putake Group is a Marlborough-based business which produces honey in Blenheim, not on the West Coast.

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It is understood the company plans to produce honey on the West Coast and is in discussions with the Gloriavale Christian Community, which has built a honey processing plant but is waiting on certification.

DWC has increased its investment in struggling West Coast dairy farms Cranley Farms Limited and Bold Head Farm Limited.

It has invested $12m in Cranley Farms, making it the biggest investment in the trust's 15-year history. It now owns 82 per cent of the dairy farm, which employs 10 people.

The annual report shows DWC's share in the Putake, Cranley Farms and Bold Head Farm companies' losses amounted to $1.8m.

The trust, and its subsidiaries, posted a loss of $1m overall, compared to a profit of $7.5m the year before.

The trust itself recorded a loss of $345,000, compared to a profit of $5.8m the year before.

Chief executive Chris Mackenzie said it had been a productive financial year, with the value of the trust's total assets increasing to $127m.

DWC's year-end loss of $345,000 was 'not ideal but also not unexpected' given it had increased its investments and grants. It approved 20 applications to the value of $14.4m, double what it gave out the previous year ($7m to nine businesses).

Mackenzie said about 35 jobs were created by almost half of the approvals made this year.

Successful applicants included EPIC Westport, S'All Good Juice Bar in Hokitika, Inchbonnie Hydro, and a new joint venture with Putake Group to set up Putake West Coast LP, a bee keeping and apiary business.

Mackenzie said DWC invested in the farms to provide long term stability to the West Coast dairy sector.

He said DWC generated revenue of $9.2m and invested $5.8m into community projects over the 2015-16 year. It gave $1m to each of the West Coast's three councils to stimulate the economy following a spate of job losses.

DWC chairman John Sturgeon said the funds invested would have a positive long term impact on the community.

'We have been supportive of the tourism sector this year. The outcome is a shared benefit for many businesses and services across our region, and that will only increase as more people visit.'