APPENDIX B BEST PROSPECTS SECTORS FOR U.S. EXPORTERS TO NEW ZEALAND (USD millions, unless otherwise noted) A. Rank: 1 B. Name Of Sector: Medical Equipment C. ITA Or PS&D Code: MED 1993 1994 1995 D. Total Market Size (est) 165.90 177.93 186.82 E. Total Local Production (est) 90.00 80.00 87.00 F. Total Exports 33.89 40.73 47.15 G. Total Imports 109.79 138.66 168.62 H. Total Imports from U.S. 42.06 54.82 68.80 I. Exchange Rate 1.88 1.81 1.81 Comments: The health care and emergency service sector is undergoing a fundamental change in how it is funded. Hospitals and emergency service providers are encountering private sector competition. This is resulting in the upgrading of facilities to attract both doctors and patients. This upgrading offers many opportunities for American manufacturers and service providers. A. Rank: 2 B. Name Of Sector: Paper and Paperboard C. ITA Or PS&D Code: PAP 1993 1994 1995 D. Total Market Size (est) 890.71 1069.84 1263.32 E. Total Local Production (est) 1000.00 1090.00 1188.00 F. Total Exports 420.38 418.85 416.63 G. Total Imports 311.09 398.69 491.95 H. Total Imports from U.S. 176.62 235.00 301.04 I. Exchange Rate 1.88 1.81 1.81 Comments: The paper and paperboard sector has been significantly recovering from low sales and stagnant growth. The current upswing in the overall economy has placed a higher demand for U.S. coated, specialty and kraft paper, which are considered to be of higher quality than the competition. A. Rank: 3 B. Name Of Sector: Industrial Organic & Inorganic Chemicals C. ITA Or PS&D Code: ICH 1993 1994 1995 D. Total Market Size (est) 282.75 335.60 382.29 E. Total Local Production (est) 20.00 23.00 24.00 F. Total Exports 26.75 35.46 45.26 G. Total Imports 279.50 331.06 377.55 H. Total Imports from U.S. 116.97 158.53 206.85 I. Exchange Rate 1.88 1.81 1.81 Comments: The demand for industrial organic and inorganic chemicals has been growing strongly. Declining exports and domestic production have contributed to the increase in American imports. This is a sector that has been identified for further research Industry Subsector Analysis (ISA) in 1994/95. A. Rank: 4 B. Name Of Sector: Agriculture Chemicals C. ITA Or PS&D Code: AGC 1993 1994 1995 D. Total Market Size (est) 128.99 176.97 228.80 E. Total Local Production (est) 20.00 23.00 24.00 F. Total Exports 7.80 4.68 2.71 G. Total Imports 116.79 158.65 207.51 H. Total Imports from U.S. 40.43 65.28 101.47 I. Exchange Rate 1.88 1.81 1.81 Comments: New Zealand imports the majority of its agricultural requirements. The upswing in New Zealand's agricultural exports has given rise to more attention to productivity. The marketplace is receptive to new innovative products, for which the U.S. is well recognized. A. Rank: 5 B. Name Of Sector: Agricultural Machinery C. ITA Or PS&D Code: AGM 1993 1994 1995 D. Total Market Size (est) 209.00 286.50 385.08 E. Total Local Production (est) 85.00 120.00 140.00 F. Total Exports 64.45 90.75 123.03 G. Total Imports 188.45 257.25 338.11 H. Total Imports from U.S. 45.48 67.78 97.26 I. Exchange Rate 1.88 1.81 1.81 Comments: New Zealand imports the majority of its agricultural machinery. The upswing in New Zealand's agricultural exports has given rise to more attention to productivity. The marketplace is receptive to new innovative products for which the U.S. is well recognized. This is a sector that has been identified for further research (ISA) in 1994/95. A. Rank: 6 B. Name Of Sector: Automotive Parts and Service Equipment C. ITA Or PS&D Code: APS 1993 1994 1995 D. Total Market Size (est) 473.11 589.19 708.23 E. Total Local Production (est) 150.00 165.00 175.00 F. Total Exports 129.44 146.40 159.41 G. Total Imports 452.55 570.59 692.64 H. Total Imports from U.S. 98.65 115.54 130.27 I. Exchange Rate 1.88 1.81 1.81 Comments: An ISA on this sector will be forthcoming. A. Rank: 7 B. Name Of Sector: Aircraft and Parts C. ITA Or PS&D Code: AIR 1993 1994 1995 D. Total Market Size (est) 516.61 649.43 786.85 E. Total Local Production (est) 30.00 35.00 40.00 F. Total Exports 24.42 28.57 32.09 G. Total Imports 511.03 643.00 778.94 H. Total Imports from U.S. 343.61 435.67 531.82 I. Exchange Rate 1.88 1.81 1.81 Comments: A recent ISA on helicopter and helicopter parts was finalized in 1994. The study indicated that there was a tremendous opportunity for spare part manufacturers. The majority of helicopter sales were imported used machines. This utilization of previously owned equipment requires more maintenance. World availability of spare parts has been constrained by a lack of suppliers. A. Rank: 8 B. Name Of Sector: Books and Periodicals C. ITA Or PS&D Code: BOK 1993 1994 1995 D. Total Market Size (est) 186.85 202.51 212.99 E. Total Local Production (est) 40.00 40.00 40.00 F. Total Exports 10.93 13.42 15.87 G. Total Imports 157.78 175.93 188.86 H. Total Imports from U.S. 33.18 32.44 30.54 I. Exchange Rate 1.88 1.81 1.81 Comments: New Zealanders have historically been prolific readers. Paperback publishing and printing costs in New Zealand are higher than in the U.S. The use of U.S. technologically and educationally based books continue to be a growth area. A. Rank: 9 B. Name Of Sector Confectionery, Sugar C. ITA Or PS&D Code: N/A 1993 1994 1995 D. Total Market Size 85.0 87.0 89.0 E. Total Local Production 72.5 73.5 74.5 F. Total Exports 2.0 2.5 2.5 G. Total Imports 14.5 16.0 17.0 H. Total Imports from U.S. 1.5 2.5 3.0 I. Exchange Rate 1.8426 1.7391 1.74 Comments: New Zealand does not produce cane or beet sugar, but relies mainly on Australia for supply of the raw product. This means there is a demand for importation of both raw sugar, and sugar based products. The recent introduction of the Hershey's chocolate range (Pacific Rim Investments) and Mars and Snickers bars (Effem Foods) has boosted imports of such products from the United States, and growth of the category overall has been strong. Further expansion can be achieved by introduction of more United States brands which may have a consumer recognition already established, the determination of which would require market research. A. Rank: 10 B. Name Of Sector: Soybean Meal (tonnes) C. ITA Or PS&D Code: 0813100 1993 1994 1995 D. Total Market Size 48,860 50,000 52,000 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 48,860 50,000 52,000 H. Total Imports from U.S. 7,943 8,500 9,000 Comments: The domestic poultry and pork industries import all their soybean meal requirements, with the volume depending on the relative price of other protein substitutes. With the growth in consumption of poultry and pork, the industries are requiring more feed inputs, and consequently imports have increased. Imports from the U.S. are moving with this trend, but with more marketing input, could make a dent in Australia's dominant market share. A. Rank: 11 B. Name Of Sector Fresh Fruit (apples and grapes, tonnes) C. ITA Or PS&D Code: 0574000, 0575100 1993 1994 1995 D. Total Market Size 59,220 55,270 56,900 E. Total Local Production 491,000 449,000 492,000 F. Total Exports 232,000 181,300 220,000 G. Total Imports 5,316 6,700 7,100 H. Total Imports from U.S. 3,885 5,100 5,500 Comments: Note that the above table refers only to apples and grapes, the fruits projected to have the greatest growth prospects. Currently grapes are the major import item, followed by citrus, and then apples. Citrus volumes have been flat, while grape volumes have been steadily increasing and apple imports have recently been deregulated away from the Apple and Pear Marketing Board's (APMB) control. Specific import volumes for the above table are: Grapes ( 4,463; 4,700; 4,900; and Apples - 853; 2,000; 2,200 tonnes. The United States is the established dominant supplier for both commodities and, for grapes, has a very good reputation for superior quality. This has been assisted by the recent removal of a mandatory fumigation requirement, which has been replaced by offshore pre-shipment inspection. Apple quality has been mixed in the past, and the cool chain will need some attention if US apples are to improve their standing. With the January 1, 1994 deregulation of the domestic apple industry, the market has been volatile, but in-season prices are currently very low, and quality has slipped from past years. In the off-season, prices are expected to bounce back to reflect the additional costs of cool storage and controlled atmosphere (CA) treatments. The APMB will be the major competitor for the US with their CA stored apples. A. Rank: 12 B. Name Of Sector Bovine Semen C. ITA Or PS&D Code: N/A 1993 1994 1995 D. Total Market Size 43.9 44.5 45.3 E. Total Local Production 42.4 43.0 43.7 F. Total Exports 2.1 2.5 2.7 G. Total Imports 3.6 4.0 4.3 H. Total Imports from U.S. 2.0 2.3 2.5 I. Exchange Rate 1.8426 1.7391 1.74 Comments: The NZ dairy sector is by far the largest consumer of genetic material for artificial breeding in NZ, and the industry is constantly seeking new sources of genetic gain. The United States is regarded as an important source of this material, along with Canada and to a lesser extent the Netherlands. Improvement of U.S. market share will depend on the lining up of performance measures between countries, and standardization of breeding indices. With the industries growth and success in recent years, interest in new genetics is high, and new options are always up for consideration.