New Zealand-China Free Trade Agreement Bill

I rise to take a brief call on Part 4, “Amendments to Fair Trading Act 1986”. I particularly want to discuss two clauses in this part: clause 21, which deals with the purpose of this part, and clause 23, which deals with a new section to be inserted. Members may wonder why I am taking a call on this particular part, given that it concerns quite a tight piece of the Act. Part 4 deals with cooperation in the field of conformity assessment in relation to electrical and electronic equipment and components.

Once again, members may wonder why I am taking a call on that particular part. It so happens that I have two companies in my electorate—two somewhat successful businesses. One goes by the name of Vectek Electronics and the other goes by the name of Future Products Group Ltd. Both these companies are involved in the manufacture and export of electronic products. Both companies will be involved in manufacturing and exporting these products to China, and both will be affected by those particular clauses in terms of ensuring that they conform with the requirements relating to electrical and electronic equipment.

I will start with Vectek Electronics, which is an amazing business—a phoenix out of the ashes of PDL Electronics from Napier. PDL Electronics was led by a gentleman by the name of Keith Valentine, who has been quite a visionary in Napier and in New Zealand circles in terms of electronics manufacturing. He is an amazing gentleman who started the company pretty much from nothing. It is now a business that makes over $20 million from the export of electronic products throughout the globe—to America, to Korea, to Japan, and to China.

It is interesting that one might not think this business would be able to compete in those markets, but it produces power smoothing equipment in the electronics area. Power smoothing is used in factories in Korea and China that produce superconductors and microchips. Those factories require specific power smoothing because, as members may be aware, there is an abundance of power in China and that power is highly volatile. It requires significant smoothing to ensure that the power delivered into the factories is smooth and that the equipment used to manufacture microchips does not fall over all the time.

Vectek Electronics is an amazing business that will be affected by Part 4, particularly clauses 21 and 23. It will have to make sure that the power smoothers it manufactures in Napier and exports to China conform to these standards and make the grade. I believe that, as a result of the free-trade agreement, Vectek Electronics will be in a much stronger position to grow exports from New Zealand and to grow wealth, jobs, and income in Napier. It is an amazing business.

The second business is called Future Products Group Ltd. It was started in 1992 by a gentleman by the name of Rob Darroch. It started with two carpenters who were producing supermarket checkouts. This company is now an amazing business that has grown significantly. It currently has exports of around $25 to $30 million, and it has a vision of achieving exports to the value of $50 million over the next 5 years. It started with supermarket checkouts, but it has now moved into refrigeration units and the electronic equipment behind refrigeration units. It has done a lot of the McDonald’s supermarket franchises. In fact, it is now one of the four McDonald’s outfitters in the South Pacific, particularly for the McCafés.

The company has had an opportunity to produce up to 500 McCafés on the west coast of America, but within Napier and New Zealand it is unable to meet that demand. So it is now looking at joint manufacture in China of some of the refrigeration units, and at exporting some of the product to China in order to add to the manufacture and take up some of its export opportunities. As a company it will also have to deal with Part 4. It will have to make sure that it is conforming to the electrical and electronic equipment standards that are required for export under this free-trade agreement. I think this is a great opportunity for those two companies, and I thank you, Madam Chairperson, for the opportunity to speak.