Southland has been the country’s regional ‘rockstar economy’ with the province leading the way in recent economic growth reports.
But questions have been raised about what comes next for the lower south after some big industry projects have either paused or stopped completely.
In the last week, plans for one of the world’s largest green hydrogen plants has been put on pause by Meridian Energy and a decade-long push to get an oat milk factory off the ground has now been abandoned.
The oat milk factory was originally meant to be located in Southland. However, last year it was revealed the whole project would move to Canterbury. The previous Labour government also contributed $6 million in terms of a loan to help the venture in 2022.
The region has tried to diversify its economy after the threat of an imminent closure of one of the region’s biggest companies, Tiwai Point Aluminum Smelter.
It’s a big employer that both directly and indirectly affect more than 2000 workers.
Earlier this year, the company struck a new long-term power deal with the energy companies which would see the smelter stay operational in Southland until at least 2044.
Southland’s regional development agency Great South has helped develop a diversification strategy for new possible industries which include both green hydrogen and oat milk.
The agency told 1News both the green hydrogen and oat milk ventures were a “big blow” but it’s “confident there are a lot of opportunities on the horizon”, including aquaculture and data centres.
Southland Business Chamber chief executive Sheree Carey told 1News: “We don’t want to be a region that’s just reliant on those two things, so it’s really important to be able to diversify and always be looking for opportunities in Southland.”
While some new industries are not going ahead, other legacy industries have plans to expand.
Milk giant Fonterra has earmarked $150 million for a new UHT whipping cream plant at the existing Edendale plant east of Invercargill.
It currently employs around 670 workers but with the addition of the plant, the number of jobs will increase by 70.
The Edendale dairy processing site is the oldest in the country.
The company hopes to have products rolling off the line by the end of 2026.
Fonterra chief operating officer Anna Palairet told 1News: “The Southland economy’s essential to farming in New Zealand and therefore essential to us.
“Our strong balance sheet gives us choices … so it’s amazing to see that investment happening in Southland.”
But the southern province has been warned not to solely rely on the smelter and agriculture as its future if there was another scare.
“I guess legacy core industries such as Tiwai and [agriculture] is showing confidence and growth so that’s good but we can’t, I guess, sit on our laurels when it comes to still looking at that diversification piece,” Carey said.
Palairet added: “We certainly see milk growing in Southland and we will continue to invest and support our farmers in that region as that continues to grow.”
