"Dairying has the ability to give New Zealand access to the newly wealthy markets of the developing world and the potential to double in Southland from the existing number of 155,000 cows," Mr Harrington told shareholders at Bluff yesterday.
In what is sure to spark a heated environmental debate, Mr Harrington put dairying potential at the forefront of several agricultural products and aluminium exports which underpinned export growth from Bluff during the past financial year, a period he described as "tumultuous".
"Agriculture is a realistic way forward and South Port is well positioned to take advantage of any development of dairying," he said.
Mr Harrington highlighted the economic potential of dairying to shareholders, saying dairying continued to be a "prime factor" in the economy of Southland and the rest of the country.
"Many are of the opinion that dairying saved the country during the worst global recession for 80 years," he said in a statement.
"For dairying growth to have an acceptable outcome will mean a trade-off between economic growth and environmental sustainability," he said.
The scenario presented a "huge challenge" to all involved but had to be worked through if the New Zealand economy was to improve, more so now the Government had decided not to extract minerals from conservation areas, he said in reference to the contentious Schedule 4 proposal which would have allowed mineral exploration in some national parks.
"[That] effectively ruled out a source of wealth for the nation," Mr Harrington said.
He said Fonterra, which is one of Port Otago's largest customers, provided South Port with its overflow production, as well as storing cheese year-round, while Open Country Dairy's Awarua plant used South Port for warehousing and exporting.
"Open Country Dairy has potential for a second dryer to be constructed in 2012-13," he said.
During the year, containerised volumes at South Port grew 21% from 24,000 to 29,000 and this financial year wood-chip volumes were projected to be up to 250,000 tonnes.
Mr Harrington's speech yesterday was wide-ranging. He said Southland could benefit from the predicted doubling in global demand for seafood, from 45 million tonnes to 85 million tonnes by 2015.
He also noted the potential in Great South Basin oil and gas exploration and exploration and development by state owned enterprise Solid Energy and listed-L&M Energy. Those investigations are looking at lignite resources, coal seam gas and wind-farming, including a coal-to-fertiliser project which could produce 1.25 million tonnes of urea annually, of which 750,000 tonnes could be exported.
• In mid-August, reporting for the year to June, South Port announced an improved before-tax profit of $7.45 million, but posted a 24% lower after tax-profit of $3.13 million, down from $4.12 million the year before. Mr Harrington said at the time this was due to the Government's removal of tax depreciation on buildings and created an additional, one-off charge of $2.08 million during 2010.
"This adjustment to profit is a one-off, non-cash, accounting entry which has no impact on the company's underlying profitability, cash flows or dividend policy."
