Story: Otago region

Page 12 – Industry and development since 1920

Otago developed rapidly in the 19th century, so when the province lost its importance relative to the rest of New Zealand in the 20th century, local business and city interests saw it as decline.

Promoting development

The Otago Expansion League (set up as the Dunedin Expansion League in 1911, but changing its name in 1915) was active through the 1920s. It drew attention to the tourist potential of the province, including Fiordland and Milford Sound, which they saw as part of Dunedin's hinterland.

On top of the world

A Fairydown sleeping bag made by Dunedin company Arthur Ellis Ltd accompanied Edmund Hillary on his ascent of Mt Everest in 1953.

While the pastoral economy prospered after the Second World War, manufacturers were handicapped by distance from the larger North Island markets, and called for lower freight rates. Other events – notably the collapse of Standard Insurance in 1961 – cast a pall over Dunedin’s commercial future.

New businesses

New businesses were in the service sector rather than manufacturing. Begg’s pianos and publisher A. H. Reed both became national companies in the mid-20th century. John McIndoe expanded from printing to publishing in the 1970s and Arthur Barnett’s department store, opened in 1903, was still running a century later. Joe Brown ran a nationwide entertainment business in the post-Second World War years.

Gold in them thar hills

In 2008 the only substantial gold-mining enterprise in Otago was the opencast Macraes mine outside Palmerston. Between 1990 and 2004 1.8 million ounces (about 50 tonnes) of gold was mined there – by comparison, the peak annual volume in 1863, at the height of the gold rush, was 601,000 ounces. Production in 2004 was 184,000 ounces (around 5,000 kilograms). Macraes is owned by OceanaGold, a Melbourne-based company that also owns mines in Reefton on the West Coast, and in the Philippines.

Large-scale projects

After the Second World War the province was shaped by big projects – electric power stations on the Waitaki and Clutha rivers, and a container terminal at Port Chalmers. More recent projects faced opponents concerned about harm to the environment.

The Clyde dam and power station proceeded – but the proposed aluminium smelter at Aramoana near Dunedin, to use electricity from the Clyde station, did not. Nor did further schemes for the Clutha and Waitaki rivers in the 1990s and 2000s.

In 2008 Meridian Energy’s proposal for a 176 wind-turbine ‘farm’ on the Lammermoor Range met with bitter opposition.

Businesses in trouble

Many traditional businesses collapsed in the later 20th century and early 2000s, as the business environment and customer demand changed. Woollen mills at Kaikorai Valley, Milton and Mosgiel, all established in the late 19th century, closed in 1957, 1999 and 2000 respectively. The Sew Hoy family’s many clothing plants closed after the removal of import protection in the 1990s.

The Fortex freezing works in Mosgiel closed in 1994, and the Fisher and Paykel (formerly Shacklock) dishwasher assembly plant in 2008. The Fortex plant re-opened as Silverstream, but was facing possible closure in 2009.

McMafia?

Dunedin is home to a network of businessmen popularly known as the ‘tartan mafia’. Members see themselves as a ‘supportive group of like-minded, generally like-schooled individuals who … work in the best interests of Dunedin and Otago’ – but critics claim it is a ‘closed, secret club that encourages cronyism, exerts undue influence around the region, provides jobs for the boys and makes it difficult for business newcomers to get established’. 1

Businesses that thrived

In the early 2000s some businesses were growing. Skeggs Groups, founded in 1952, had expanded from seafood into tourism, transport and property. Ngai Tahu Seafood has two plants in Dunedin. Mainland Poultry Ltd is New Zealand’s largest egg producer. McKinlay’s footwear sells throughout New Zealand and Australia.

Stockbrokers Forsyth Barr, established in 1936, took innovative national directions in the financial service industry from the 1970s. Creative-industry companies like Animation Research and Natural History New Zealand were thriving in the 2000s.

Rural economies have been reinvigorated in the 1990s and 2000s: in Clutha district, farms have been converted from sheep to more lucrative dairying, and vineyards and wineries have been developed in parts of Central Otago.

Footnotes:
  1. Paul Gorman, ‘Closing in on the tartan mafia.’ Dominion Post, 19 May 2004, p. C11. › Back
How to cite this page:

Malcolm McKinnon. 'Otago region - Industry and development since 1920', Te Ara - the Encyclopedia of New Zealand, updated 13-Jul-12
URL: http://www.TeAra.govt.nz/en/otago-region/page-12