Opportunities in the New Zealand Seafood Industry Slides taken from presentations made by Rob McLeod Chairman, Aotearoa Fisheries Ltd and by Robin Hapi Chief Executive Officer, Aotearoa Fisheries Ltd

Our Assets and Operations 100% owned –Moana Pacific Fisheries –Pacific Marine Farms Joint ventures –Sealord Group : equally owned with Nippon Suisan –Prepared Foods Group : in partnership with Ocean Ranch

Our People Board of Directors Executive Management Team

Our Directors

Our Shareholders Beneficial owners are Iwi Two types of shares – –Control shares that are owned by Te Ohu Kaimoana Trustee Ltd –Income shares that are owned 80% by Iwi with the remaining 20% of income shares being held by Te Ohu Kaimoana

Our Group Composition

Our Management Structure Operations Manager Richard Wells Acting Marketing Manager Tom McClurg Divisional Manager Abalone Jim Pendleton Divisional Manager Aquaculture Dean Moana Manager, CRA Dave Shields Manager, Eels John Jameson GM Strategy & Planning Tom McClurg Chief Financial Officer Danny McComb Chief Executive Officer Robin Hapi Based at AFL Head Office

Mission Statement Our vision is that AFL is a strong seafood business delivering growth in shareholder wealth to Iwi

Our Quota Portfolio

Our Assets Total Assets 10 months ended 30 Sept 2005 $000 Total Assets Total Liabilities Total equity at end of period 371,328 50, ,489

Issues facing Aotearoa Fisheries Limited Ongoing commercial success and profitability are the key requirements of durability Re-empower Maori in the management of customary and commercial fisheries Common interest to protect property rights AFL’s support for Iwi organisations

Issues facing the Industry Value of the dollar Dilution of property rights MFish costs and performance Environmental Lobby Distance from Markets New species into the QMS Fisheries management by owners Overcapitalisation of quota Seafood prices Size of the industry National and world economies

Value of the Dollar Only enduring solution is to focus on long-run efficiency, by minimising costs and maximising revenues

Erosion of Property Rights Continued presence of illegal catch Dilution of the term utilisation Reallocation of increases in stock abundance Quality of aquaculture property rights

Ministry of Fisheries Cost of administering the fisheries sector Improved performance, accountability and transparency Performance of the compliance division to be improved

Environmental Lobby Concept of “sustainable utilisation” –Unbalanced emphasis placed on preservation within the environmental lobby

Distance from Markets Best information, communication and technology to overcome distance from international markets Difference in the world market must be maintained and defended

New Species into the QMS AFL agrees with the principle that fisheries should be either open or in the QMS

Fisheries Management by the Owners Purpose of the Act – “provide for the utilisation of fisheries resources while ensuring sustainability”. Utilisation means – “conserving, using, enhancing and developing fisheries to enable people to provide for their social, economic and cultural well-being”.

Over-capitalisation of Quota Maximising the value of ITQ can be difficult to explain or sustain AFL has adopted an EVA performance framework – all investment is charged a weighted average cost of capital

Seafood Prices Success for some operators and species to grow the domestic market Tough year for rock lobster Volatile worldwide markets Expect great opportunities for seafood sector with China

Size of the Industry Is it sensible for New Zealand to run their own half full trucks? Can co-operation unlock economies of scale?

World Economies Knowledge on developments in the world economies and trade relationships between countries Acknowledge the work of Alastair Macfarlane and the group within NZ Trade & Enterprise

Moving forward : AFL’s approach Divisionalisation of wholly-owned companies Establishment of head office in Wellington Adoption of EVA framework to plan and measure the performance of divisions and people

What can we do smarter? Unified approach to protect the QMS Multiple uses should be matched with multiple responsibilities Rationalisation within the industry Improve the approach to managing our assets

Opportunities in the New Zealand Seafood Industry Presentation made by Rob McLeod Chairman, Aotearoa Fisheries Ltd at the Seafood Industry Council Conference on Wednesday 18 May 2005