Crop & Food Research recorded a 14% growth in revenues during the 2005-06 financial year, but ended the year with a loss of just under $1.5 million, largely due to expenditure associated with its commercialisation programme.

Announcing the result, Chairman Richard Bentley said he expected the organisation to return to profitability in the 2006-07 year.

“During the past year we made investments in commercialisation from which the cash benefits are yet to flow. We have used the government’s Equity Investment Fund to support market development of our start-up company GraceLinc (commercialising barley beta-glucans) and this expenditure resulted in a loss.”

Mr Bentley said the Board was working towards attracting additional funding partners for GraceLinc to assist in the commercialisation programme.

While commercialisation activities contributed much of the result, other contributing factors were below-budget commercial revenue growth, the increased costs of doing science, and the impact of inflation on the value of long-term research programme funding.

“During the year we also made investments into science capability using a significant proportion of retained earnings and the government’s Capability Fund.”

These areas included nutrition, health and food science and seafood and advanced seafood processing technologies.

“These investments were made by weighing the balance of New Zealand good versus commercial return. We believe this investment will result in growth in the food and seafood industries, and ultimately their ability to fund science research in the future.”

Chief executive Paul Tocker said the quality of the organisation’s science was high, with the formation of a number of significant new international research collaborations.

“A significant, new, long-term relationship was established with CSIRO’s Food Futures Flagship in Australia, called GlycANZ. This initiative brings together the two organisation’s research capability in blood glycaemia prediction and measurement, with an end focus on health including diabetes.

“In addition we were invited to join the International Potato Genome Sequencing Consortium, and we are developing additional scientific links with China.

“The investments we are making in underpinning science is an investment in future capability. Ultimately, the stamp of value is demonstrated by additional sectoral growth and start-up capability, which flows through into start-up companies and exports.

“We are bringing forward successful commercialisation entities but this is not a short-term process and requires a longer-term commitment to investment, particularly in market development.”

He said Crop & Food Research has an increasing number of researchers participating in key areas of research with other national and international organisations, and it enjoys strong productive collaborative relationships.
“And once again we published a large number of excellent publications in peer-reviewed journals”