The Kangaroo Island Economic Development Outlook Office of the Commissioner for Kangaroo Island Images courtesy of Brand Kangaroo Island, the South Australian Tourism Commission and Kangaroo Island Community Education. Contents Preface . . . . . . . . . . . . . . . . . . . . . . . . . 1 Background . . . . . . . . . . . . . . . . . . . . . . . 2 Foreword from the Kangaroo Island Industry and Brand Alliance . . . . . . 3 Unlocking our resources, energy and renewables . . . . . . . . . . . 10 Premium food and wine exported to the world . . . . . . . . . . . . 12 The knowledge state - attracting students and commercialising our research . 14 . A destination of choice for travellers . . . . . . . . . . . . . . . 16 Growth through innovation . . . . . . . . . . . . . . . . . . 19 We’re the best place to do business . . . . . . . . . 21 Promoting our international connections and engagement . . . . . . . . 24 Access to capital and global markets for small businesses . . . . . . . . 26 Resources . . . . . . . . 28 . . . . . . . . . . . . . . . . . . . . . Preface Kangaroo Island is the third largest Island in Australia and one of the top four tourism destinations in this country that boasts unspoiled nature, immersive natural experiences, purity and quality of food and wine and sustainable development. Kangaroo Island is in the midst of economic transition, with more than $171 million of proposed and announced projects planned for the Island over the next 3-5 years and an estimated 300 new jobs connected to this growth. There are ‘knock on’ growth and expansion opportunities for current businesses on the Island across many industries. This period of high economic activity is positioning Kangaroo Island as an ideal place to invest or expand. The variety of industries active on the Island paired with KI’s pristine environment could give rise to a wealth of research, innovation and education opportunities. The South Australian Government in partnership with the Kangaroo Island Council is committed to supporting this growth. Through the previous work of the Kangaroo Island Futures Authority and now the Commissioner for Kangaroo Island, there are real opportunities for the Island to fulfil its enormous potential. A transformation project being led by the Commissioner for Kangaroo Island in partnership with the Kangaroo Island Industry and Brand Alliance is supporting the local community, current and emerging businesses and the workforce to be in the best position to benefit from the economic opportunities and current activity on the Island. The Island attracts almost 200,000 visitors per year with tourism making a strong contribution to the Island’s economy; agriculture, food and wine, retail and services make an equally significant contribution to the Island’s Gross Regional Product. All economic indicators point to increased visitor numbers, demand for accommodation and an increase in visitor experiences along with a greater demand on production of food and beverages. The Kangaroo Island Economic Development Outlook outlines the key areas of development expected to take place on the Island in the short to medium term as well as current projects and areas of future growth. This Outlook has been developed in partnership with Kangaroo Island’s key industry groups, the Kangaroo Island Council, the Office of the Commissioner for Kangaroo Island and the Government of South Australia. It demonstrates that collaboration and partnerships can support tangible economic development in South Australia’s regional areas. The Hon. Jay Weatherill Premier of South Australia Peter Clements Mayor for Kangaroo Island Council Wendy Campana Commissioner for Kangaroo Island 1 Background Momentum has been growing in recent years to ensure the social, environmental and economic sustainability of Kangaroo Island. In 2011, the Kangaroo Island Futures Authority (KIFA) was formed by the South Australian Government upon recommendation by the State’s Economic Development Board in the Paradise Girt by Sea report. During 2012 and 2013, the State Government, KIFA, the Kangaroo Island Council and many Islanders worked together to identify and unlock key opportunities for Kangaroo Island. This work resulted in a comprehensive suite of policies that not only aligned with the Government’s strategic vision for Kangaroo Island but also aimed at encouraging positive and sustainable investment on Kangaroo Island to ensure its long-term economic future. 2 In May 2015, the Commissioner for Kangaroo Island was appointed. The Commissioner for Kangaroo Island Act 2014, establishes the position of the Commissioner and outlines the roles and functions of the position. In essence, the Commissioner’s key responsibilities are to improve the management and delivery of services and infrastructure by government agencies, provide assistance to businesses and residents dealing with government agencies, and assist in improving the local economy of Kangaroo Island. The Commissioner is actively working with local businesses and the Island community to support them to meet the demands of current and future developments on the Island. The Commissioner is also liaising with investors, development proponents, Council, State Government and the Australian Government to connect and align economic opportunities with government regulatory roles, policy development and program delivery. Foreword from the Kangaroo Island Industry and Brand Alliance Kangaroo Island Industry and Brand Alliance is the first regional organisation to bring together all industry sectors under one framework with the strong belief that the Island will benefit most from approaching our opportunities for economic growth from a foundation of positive collaboration. The Alliance Board includes representation from Agriculture KI, Business KI, Kangaroo Island Food and Wine Association and Tourism KI, and every industry has a renewed confidence and positive outlook for their sector. The opportunities currently facing the Island are unique. The focus of the Government of South Australia, through the work of the Kangaroo Island Futures Authority, and now the Commissioner has brought tangible and real opportunities for the Island to fulfil its enormous potential. The formation of the Kangaroo Island Brand has been an important first step and is the foundation of our work to drive regional prosperity. Capturing the Island’s shared values, the Brand conveys the essence of the Island and tells a consistent and unique story to the world. The distinctive trust mark provides the consumer confidence in the authenticity of the Island’s products or experiences and is driving consumer awareness and demand. Our Brand and our commitment is to build on the opportunities ahead, promoting our shared vision to celebrate what makes Kangaroo Island truly unique and to grow our regional prosperity. The Island holds a special attraction, it is a place apart, and still holds dear the values that are sought by consumers wanting immersive, natural experiences, purity and quality of food and wine and time to reconnect and pause. Tony Nolan Chair of the Kangaroo Island Industry and Brand Alliance 3 What’s happening on Kangaroo Island Key Announced Projects The following projects have been announced and some are currently going through State Government development planning approval processes. Project Funds to be invested Expected job creation Overview American River Resort and Marina/Wharf Development $35 million 100 direct jobs A 4-star, $35 million resort, including a marina at American River has been given major project status by the South Australian Government. • City and Central Consulting The resort is expected to feature: • tourist accommodation and facilities • function and conference facilities • marina and ferry docking facilities • retail premises • commercial premises • maintenance facilities • 160 hotel rooms with 40 individual villas. Feral Animal Eradication Program: Deer and Goat $2.5 million 5 direct jobs • Government of South Australia • Australian Government • Natural Resources Management Kangaroo Island • Kangaroo Island Council Golf Course, Club house and Resort • Programmed Turnpoint Pty Ltd Feral animals devastate natural eco-systems, primary production and impact water quality. Australian Government funds, with in-kind support from the Government of South Australia is working towards a total feral deer and goat eradication on Kangaroo Island. The program is one year from completion, but is progressing successfully. Anticipated return on investment in eradicating these pests from KI is several million in flow-on benefits to primary producers and nature-based tourism. $30 million 30-50 direct jobs Development authorisation has been granted by the Government of South Australia for an international golf course and resort on the southeast coast of Kangaroo Island. The golf course development will include a world class, 18 hole championship-length golf course and practice facilities, providing 22,000 rounds per year. This development will include a clubhouse with dining and function facilities and 20 twin-bedroom suites. 4 Project Funds to be invested Expected job creation Overview Kangaroo Island Airport Upgrade $18 million 25 construction and almost 200 indirect local jobs The South Australian Government has contributed $9 million, with the Federal Government contributing the remaining $9 million via the National Stronger Regions Fund for the $18 million Airport Upgrade project. The project proposal includes runway lengthening and strengthening, apron expansion, and an upgrade of the existing terminal. • Kangaroo Island Council • Government of South Australia • Australian Government Undersea Cable The Kangaroo Island Airport upgrade will enable the airport to accommodate larger aircraft and subsequently allow for direct, non-stop flights from Melbourne, Sydney and Perth to improve access to the Island for tourists and freight. It will also enable businesses and residents on the Island to gain direct flights to major states of Australia. $45 million TBC Kangaroo Island’s energy is currently provided through an ageing undersea cable from the mainland. In partnership with SA Power Networks, a submission for the 2015-2020 Regulatory Period has recently been accepted by the Australian Energy Regulator (AER) for the replacement of this cable prior to its failure. SA Power Networks will consider other options for the provision of energy as part of the AER process. Wilderness Trail • Government of South Australia • Australian Government $6 million 20-30 direct and ancillary services jobs Expected to be one of Australia’s great walks, this 66km multi-day walk through the Western Parks of Kangaroo Island will be a world-class attraction. The project will provide an anticipated $4.4 million boost to Kangaroo Island’s annual economy with 20-30 jobs associated with the walk and ancillary services developed across the Island. 5 Key Proposed Projects The following projects represent a sample of proposed developments and business opportunities on Kangaroo Island. Investment opportunities may exist for some of these developments. Project Project Overview Acacia Apartments Acacia Apartments is located in Kingscote, Kangaroo Island. The 4.5-star apartments include ten high-quality, fully equipped self-contained holiday units with adjacent ground floor parking. Facilities include a conference/function room with kitchen facilities, a heated indoor swimming pool and an on-site manager’s residence. Opportunities exist to invest in this business. Aurora Ozone Hotel Aurora Ozone Hotel is the original foreshore hotel in Kingscote. Part of the Aurora Group, it is managed by 1834 Hotel Group that operates hotels across Australia. With the recent announcement of the Kangaroo Island Airport Upgrade, the Aurora Ozone Hotel is looking to expand its operation by adding 45 4-star rooms. This would increase the hotel’s capacity by between 16-32,000 bed nights per year. This $15 million investment would create a significant boost to Kangaroo Island’s accommodation capacity, particularly during peak tourist seasons. Bickfords Distillery Development (Kingscote Wharf) An unsolicited bid has been put forward to the Government of South Australia by Bickford’s Australia to develop a craft distillery and microbrewery in addition to a visitor and function centre. Bickford’s Australia The old Kingscote Police Station and surrounding lands is the proposed site of the distillery. A business case is currently being developed by the proponents, which would outline this opportunity to expand on Kangaroo Island’s food and beverage offerings. Dudley Wines Function Room Dudley Wines are expanding their existing Cellar Door building on Kangaroo Island’s stunning north coast to include a function room, extended deck area and kitchen with the capacity to cater for up to 200 people. This project is due to be completed by the end of 2016 and is a $500,000-$600,000 investment. Emu Bay Housing Development and Holliday Village A housing development is proposed for Emu Bay that would include 78 allotments of 1500m2, which would be comprised of residential and holiday accommodation. In addition, an adjacent two hectare section of land would be home to a Holiday Village development that would include individual architecturally designed villas, accommodating 200 or more guests. Amadio Group A restaurant, cafe, health spa and other leisure facilities are expected to be included in the Holiday Village development. Opportunities to use renewable energy sources to power the site would be explored following development approval. Feral Cat Eradication Program • Australian Government • Government of South Australia • Natural Resources Management Kangaroo Island • Kangaroo Island Council 6 The Kangaroo Island Natural Resource Management Board (KI NRMB), and the Department of Environment, Water and Natural Resources (DEWNR) together known as Natural Resources Kangaroo Island (NRKI) are partnering with the Kangaroo Island Council, and Primary Industries and Regions SA (PIRSA) to deliver a comprehensive feral cat eradication project on Kangaroo Island. The consortium is fully committed to eradicating the Island’s feral cats, to improve the Island’s sheep industry production and profitability; protect the Island’s biodiversity and endangered species; and move towards a cat free Kangaroo Island. This investment will support disease research to determine the economic impacts of cat-borne diseases on Kangaroo Island and establish baseline monitoring programs. The investment will benefit up to 50 native species on Kangaroo Island, ensuring a safe haven for the endangered Kangaroo Island Dunnart and the Hooded Plover. Project Project Overview Forestry Port Kangaroo Island’s major forestry operators are considering the development of a port and facilities to accommodate bulk-shipping services to export timber and other Kangaroo Island produce directly from the Island. New Forests and KI Plantations are considering the development of a shared port facility on Kangaroo Island, which will open avenues for freight transport. • New Forests • Kangaroo Island Plantations At the time of publication the South Australian Government had not received development planning application for this development, nor has such a proposal been declared a major development or project. Kangaroo Island Bike Trail • Government of South Australia Plans to develop a bike trail which circumnavigates Kangaroo Island’s 540km coastline are being explored. This would be made up of smaller loops of spectacular coastline and scenery amidst an abundance of rare flora and fauna. The trail would take 5-10 days to complete and would link current popular tourist destinations, food and wine attractions, historic and iconic sites, beaches and fishing spots. The trail would be supported by privately owned service providers for food and accommodation including bed and breakfasts, hotels, motels, caravan parks, farm stays as well as new and existing public and National Park camping facilities. The trail would provide excellent opportunities for guided tours and would be open 365 days a year. There would be no charges to use the trail. Kingscote Wharf Precinct Development Kingscote Wharf precinct is prime sea-front land in the heart of the Island’s main township Kingscote. There are plans to make this State-owned land available for private sector investment, with a number of interested parties already identified. • Kangaroo Island Council • Government of South Australia This project has the potential to rejuvenate the heart of the town, with significant opportunities for commercial investment. Kangaroo Island Outdoor Action Kangaroo Island Outdoor Action has been operating on the Island since 2007. Providing a range of tourism experiences including sandboarding in the Little Sahara, kayaking at Harriet River, and quad-biking around Vivonne Bay, KI Outdoor Action have won numerous awards including Gold Medals at the South Australian Tourism Awards in the last three years. With over 11 square kilometres of coastal land in the Vivonne Bay area, opportunities exist to invest in this business. Sunset Winery Sunset Winery was the first purpose built cellar door winery established on Kangaroo Island, which received a 4.5-star rating from renowned wine critic James Halliday in 2013. Sunset Winery uses fruit sourced from Kangaroo Island vineyards on the Dudley Peninsula and Cygnet River area to produce Sauvignon Blanc, Chardonnay, Sparkling Shiraz, Cabernet Sauvignon and Shiraz varieties. Opportunities exist to invest in this business, or to lease the premises for other tourism based enterprises. 7 , Kangaroo Island will be experiencing a period of increased economic activity over the next three to f ive years - with signif icant developments taking place. The Government of South Australia will work closely with the Kangaroo Island Community and Council to ensure that the social, economic and environmental outcomes from these developments are supported and enhanced., The Hon. Geoff Brock MP Minister for Regional Development 8 , Supporting Kangaroo Island businesses to expand and create jobs is central to this Economic Development Outlook. More than $171 million worth of developments either approved or in the planning stages are expected to create more than 300 new jobs. State Government programs and support services will be available to help Kangaroo Island achieve these outcomes., The Hon. Kyam Maher MLC Minister for Employment Planning The Kangaroo Island Council and the Government of South Australia has recognised that, with the potential for significant growth on the Island, the structure of population centres around the Island needed relevant development zoning and controls to deliver appropriate development. ,Planning policy has been realigned to achieve the Government,s strategic vision for Kangaroo Island, and importantly to unlock opportunities for investment and guide development. The themes of opportunity, people, improved access, agriculture and tourism are well catered for., The Hon. John Rau MP Minister for Planning Recent reforms to Kangaroo Island planning strategies aim to: • Encourage additional tourist-related activities around the Kingscote and Penneshaw wharves. • Encourage sustainable growth in Kingscote, Penneshaw, Parndana and American River making the best use of their existing and expanded infrastructure. • Incorporate high-quality design to protect coastal landscapes. • Maintain a balance between supporting growth, competitiveness and productivity and protecting the Island’s natural resources and distinctive character. • Reinforce the expanded role of Kingscote and Penneshaw as the main passenger and freight gateways to the Island. • Provide opportunities for new tourism experiences and accommodation in the Coastal Conservation, Conservation, Primary Production and Water Protection zones, taking into account the priorities for these areas (e.g. conservation, farming and scenic amenity) by removing limitations. • Ensure developments surrounding the Kangaroo Island Airport do not hinder its anticipated future expansion. • Support opportunities that enable forestry to contribute to the ongoing economic prosperity of the Island in line with community expectations. • Provide for a wider range of rural industries across the Island. The South Australian planning system enables major developments, major projects and unsolicited bid processes to manage large-scale developments. The Council, through its planning staff and development assessment panel, manages assessment and approvals of smaller scale projects. Information on the South Australian Government planning processes and development applications are listed in the ‘Resources’ section of this document. ,Planning for our future is achieved through integrating social, economic, and environmental outcomes for the community while respecting our Island,s values., Peter Clements Mayor for Kangaroo Island Council 9 Unlocking our resources, energy and renewables Energy Improving energy resources and distribution on the Island will provide significant benefits for business developments and future investment opportunities. Utilising renewable energy options on Kangaroo Island is consistent with the Island’s desire to maintain its global reputation of being clean and green and preserving its pristine environment. Kangaroo Islanders recognise that renewable energy generation and storage options will play a major role in minimising costs and enhancing network capacity, reliability, security and quality on the Island. Currently the Island’s energy is supplied by an ageing undersea cable, which runs between Cape Jervis (on the mainland) and Cuttlefish Bay (east of Penneshaw). SA Power Networks has gained acceptance by the Australian Energy Regulator for the replacement of the cable to ensure ongoing security of energy provision. The $45 million project will also examine ‘green’ energy options by seeking submissions for renewable energy alternatives. 10 There is strong support for renewable energy and energy storage projects – as a complement to, rather than as a substitute for, a connection to the national grid and the National Energy Market. Through the Visible Solar Project the Kangaroo Island Council, together with Renewables SA and Regional Development Australia, has installed 50KW of solar at the airport and 15KW at the Council offices in Kingscote with plans to expand further. More than 700 solar power systems are in operation on the Island, producing 2,000 KW of electricity with 25 per cent of the businesses and residences on the Island using renewable energy. The Kangaroo Island community is demonstrating it is actively embracing renewable energy. Looking beyond fossil fuel reliance will position Kangaroo Island as a leader in greenhouse gas emission reduction. This widespread acceptance of renewable energy will further enhance the Island’s position as a destination for tourism and an attractive place to live and work. , South Australia leads the nation in the development of renewable energy. By 2025, 50 per cent of our electricity will come from renewables. Kangaroo Island is embracing renewable energy generation, with more than 700 solar power systems installed on the Island, and there is strong support for its expanded use in business, residences and government agencies., Opportunities • Establish a modern, reliable, secure and comparable link to the National Energy Market to provide opportunities for future export of power from the Island to support growth in the Southern Fleurieu. • Improve infrastructure and develop localised hybrid grid and renewable power solutions to manage demand and local grid capacity issues. • Increase the use of solar, wind, wave, tide, biomass and micro-hydro generation and investigate opportunities for energy storage, SMART grid control and demand management technology through pilot projects utilising new renewable technologies. The Hon. Tom Koutsantonis MP Minister for Mineral Resources and Energy 11 Premium food and wine exported to the world Food and Beverages Kangaroo Island produces food and wine as mother nature meant it to taste. The Island’s remoteness, unique environment and the community’s connection to the natural world have influenced producers to deliver unmistakable quality, purity and flavour. Their emphasis on ethical, traceable, non-Genetically Modified (GM) food production is an understandable extension to the community’s values, that are increasingly sought after by the world’s markets. The Island’s iconic and diverse food and beverage offerings include: The Island was officially declared an Australian wine region in 2001, acknowledging its place alongside some of the world’s best. The Island’s temperate, coastal climate is ideal for growing grapes and produces wines with a purity and restraint that makes them a perfect match to the region’s artisan food. There are 13 wineries operating on the Island, many offering cellar doors, which in the 2015 vintage produced 175.5 tonnes of grapes. Varieties produced on the Island include: Red White Shiraz Sauvignon Blanc • Sheep’s milk yoghurt and cheese Cabernet Sauvignon Pinot Gris • Wine, apple cider, beer, spirits and other premium beverages Grenache Riesling • Honey and bee products (wax, honeycomb, propolis) Merlot Chardonnay • Olives and extra virgin olive oil Pinot Noir Savagnin • Hydroponic lettuce and herbs Cabernet Franc Semillon • Free range eggs Malbec Viogner • Prime lamb, beef, free range pork and poultry Sangiovese • Eucalyptus and lavender oil and products • Jams, condiments and other niche food products • Non-GM grains including canola, wheat, cereals and pulses • King George whiting, snapper, garfish, lobster, oysters, abalone and much more • Freshwater marron and barramundi 12 Kangaroo Island also boasts the production of a range of premium beverages including handcrafted boutique spirits, beer and cider – many of which use local seasonal botanicals to provide flavours distinct to the Island. Pure Kangaroo Island bottled rain water is also widely available. The Island’s farmers run about 536,000 head of livestock including sheep, which are bred for prime lamb and wool production, free range pigs, cattle and other livestock. Kangaroo Island honey is produced by the world’s purest remaining strain of Ligurian bees bought to the Island in the early 1880’s, and now protected as the Island has official bee sanctuary status. The honey’s distinct flavour is in high demand from consumers and is sought after for use in food, beverages and beauty products. , Kangaroo Island Food and Wine Association members provide consumers with quality foods and beverages, using fresh local ingredients to enhance the dinner tables of clients all over the world. There is enormous potential to increase production to meet growing markets., Tony Nolan Chair of the Kangaroo Island Food and Wine Association Opportunities: • Develop a small kill facility on the Island to facilitate local value-add, reduce freight costs for farmers and improve the promotion and sale of branded Kangaroo Island lamb, beef, pork and poultry. ,The reputation of Kangaroo Island,s food, wine, spirits, beer and cider is gaining important recognition in niche domestic and international markets. The Island,s food and beverage industries are responding to these growth opportunities, offering premium products produced in our clean environment, and traceable to their source., The Hon. Leon Bignell MP Minister for Agriculture, Food and Fisheries • Introduce product manufacturing for branded food and beverages on the Island including shareddistribution models and increased promotions to expand opportunities and boost local employment. • Promote the traceability of Kangaroo Island branded produce. • Increase the high-value export market for honey and bee products sourced from Ligurian bees. • Pair Kangaroo Island producers with other local businesses to create exclusive food and beverage experiences and increase food and beverage based tourism by enhancing and expanding cellar door experiences. • Increase the provision of local seafood on the Island for local food service and high-end restaurants and retailers nationally and promote Kangaroo Island’s regional and quality produce to visitors. • Connect tourism experiences with fishing and seafood. Kangaroo Island can attract new visitors in search of experiences that include adventure, nature and the freshest of seafood. • Investigate export opportunities through seafood processing companies that consolidate large export parcels. • Investigate the opportunities for, and barriers to, increased production of organic and biodynamic certified produce to increase sustainability and profitability, and further leverage the clean, green brand of Kangaroo Island. 13 The knowledge state - attracting students and commercialising our research Research, Development, Innovation and Education South Australia is developing its agenda for innovation and being the knowledge state. Kangaroo Island is well placed to work with the private sector, community and governments to develop and refine an agenda for research, development, education and innovation that will benefit the Island and the State of South Australia. Kangaroo Island provides unique research and development opportunities due to its rich and varied environment. The Island setting provides a ‘one stop shop’ to explore disciplines such as marine biology, coastal management, ecology, animal science, agriculture, aquaculture, viticulture and environmental management. By establishing facilities or campuses to accommodate the delivery of tertiary education, which would cater for local and international students, Kangaroo Island could provide experiential learning for both students and academics, through the provision of tailored education programs and support of research and development agendas. Educational opportunities will emerge over the short to medium term with vocational training expected to expand to meet the demands of increased visitation and population growth. Growth in apprenticeships, retail, tourism, services and hospitality training will be required to support local workforce engagement for the Island’s economic development. ,Environmental and culinary tourism, and agriculture and land management are all important industries with growth opportunities on the Island. Kangaroo Island Community Education supports skills development among students to perform the jobs of the future., The Hon. Susan Close MP Minister for Education and Child Development Minister for Higher Education and Skills 14 Kangaroo Island Community Education (KICE) has close links with industry and business. With campuses in Penneshaw, Parndana and Kingscote, the curriculum structure at KICE allows for transition to career paths via university, trades and apprenticeships. A Rural Production facility at the Parndana campus provides sustainably farmed barramundi and hydroponic herbs to Southern Ocean Lodge. KICE provides Trade Training Centres focusing on Hospitality, Engineering and Automotive, Civil Construction and Food Processing in addition to Agriculture, Aquaculture, Tourism and Business Vocational Education and Training (VET) programs. KICE engages strongly in the School Based Apprenticeship (SBA) system via a variety of industry areas. There are a high percentage of students transferring these to full time apprenticeships when transitioning from KICE. These programs support skills development in young people and adults to ensure those seeking employment will be equipped to fulfil future work opportunities on the Island. Opportunities • Establish tertiary education courses that could be delivered on Kangaroo Island, which are linked to Australian tertiary education programs. Courses would provide students with experiential learning opportunities in a variety of fields such as horticulture, resource management, tourism and agriculture. • Link local and regional research and development agendas with international universities, particularly in China. University partnerships could also be established with national universities with campuses on the Island to increase the take up by students throughout the year. • Promote KICE and Kangaroo Island as an ideal location for the Department for Education and Child Development’s International Education Program to increase the number of international secondary students studying at KICE. , Kangaroo Island,s businesses stand ready to play their part in growing the local economy by training their staff and employing vocational educational graduates to meet new and emerging industry needs., Sharon Kauppila Chair of Business KI • Investigate opportunities for ‘voluntourism’, where volunteers travel to Kangaroo Island for short and long-term period to support natural resource projects and conservation and research. 15 A destination of choice for travellers Tourism Kangaroo Island is a unique and authentic tourism destination where visitors are surrounded by amazing experiences, not just water – where holidays are measured in indelible memories. An abundance of wildlife, nature, coastal and adventure experiences for visitors to enjoy along with exceptional local food and beverages. The Island has a range of distinctive accommodation venues, from remote heritage lighthouse cottages, 5-star luxury hotels, cliff top retreats or beach side cottages. There are more than 300 tourism-related business operators offering a variety of experiences for almost 200,000 annual visitors. Remarkably, more than 40 per cent of the Island is covered in native ‘old growth’ bushland, and over 30 per cent is protected wilderness areas or national parks. The Industry promotes environmental stewardship, innovative and sustainable tourism practices, ensuring the authentic ‘in the wild’ experience you see today will be the same over generations to come. Examples of some popular experiences on Kangaroo Island include: Adventure and outdoor action • Quad biking, kayaking and sand boarding with Kangaroo Island Outdoor Action • Cycling • Walking/hiking 16 Ocean experiences • Meet the locals at Seal Bay • Marine tours and ocean safaris • Fishing charters • Snorkelling/diving • Swimming and enjoying pristine beaches and landscapes • Windsurfing • Surfing • Sailing Nature • Raptor Domain – ‘in flight’ birds of prey demonstration • Walking and hiking adventures on the KI Wilderness Trail • Up close and personal with koalas and kangaroos at KI Wildlife Park • Emu Bay Lavender Farm • National and Conservation Parks - Admirals Arch, Remarkable Rocks, Seal Bay • Stokes Bay • Emu Ridge Eucalyptus Farm • Feeding pelicans at Kingscote Wharf According to data collected by Tourism KI through the Tourism Optimisation Management Model (TOMM) tool, Kangaroo Island welcomed 197,701 visitors in the 2014-2015 financial year. Visitation to the Island has seen a steady increase over the past seven years, with total visitation up 12 per cent and expenditure up 43 per cent. With more than 500,000 annual visitor nights in South Australia, the Island hosts 30 per cent of total international visitor nights in South Australia. , Kangaroo Island will continue to grow its tourism market, providing exceptional information services and contributing to the development of memorable experiences that exceed our visitor expectations., In 2013-14, the tourism industry contributed an estimated $139 million to the Kangaroo Island regional economy (60.8 per cent of gross regional product) and directly employed 500 people, representing 22.9 per cent of regional employment. It is known that a majority of visits to the region are for overnight stays by Australians alone, but with a total cost of $99 million and an average nightly spend of around $279, it is predicted that tourism expenditure will grow by 49 per cent by 2020. Kangaroo Island is a key contributor to the state economic tourism target and a regional Destination Action Plan (DAP) has been developed to deliver specific actions for the region. Key tourism actions that will be activated include: • Domestic and international promotions including increased public relations and media opportunities • Attendance at travel trade events targeting key international markets such as the United Kingdom, Europe, the United States of America and South East Asia Visitation to Kangaroo Island is expected to grow over the next decade with recent announcements to invest $171 million in new infrastructure, tourism facilities, hotels and a major upgrade of the Kangaroo Island Airport. As a result, visits to the Island are expected to grow by 33 per cent by December 2020. ,Kangaroo Island is home to some of the world,s most stunning natural landscapes. There really is nowhere else quite like it. Tourism contributes more than $130 million to the local economy and directly employs 500 people. The State Government knows how significant tourism is to the region and we are continually promoting and marketing Kangaroo Island on the international stage., • Developing tourism products supporting local produce • Supporting industry capability initiatives for tourism operators Pierre Gregor Chair of Tourism KI • Upgrading accommodation facilities. The Hon. Leon Bignell MP Minister for Tourism 17 Kangaroo Island is one of the most appealing destinations for domestic and international markets and is one of Australia’s strongest tourism assets. It has the potential to grow without sacrificing its consumer appeal as ‘Australia’s Galapagos’ and already has a large number of saleable tourism products ready for international distribution. Increased employment, tourism activity and population growth will occur with the approval of exciting new private tourism projects including the American River Resort, Golf Course, Kangaroo Island Resort, Bickford’s Kingscote Wharf Project and a new tourist park at Emu Bay. With the Kangaroo Island Airport upgrade to be complete by mid-2017, interest is now being sought for a new carrier to offer services direct from the east coast. This direct service will bring a significant increase in international and domestic visitation and scope for additional products, experiences and infrastructure to cater for the increased demand. Furthermore, the South Australian Tourism Commission invested in key infrastructure upgrades at Penneshaw Wharf to accommodate an increase in cruise ship arrivals for the Island. Since 2012, the number of cruise ship arrivals has increased from 3 cruise ship visits in the 2012-13 season, with 2,714 passengers and crew, to 7 ship visits in the 2014-15 season with 12,401 passengers and crew. Revenue exceeded $600,000 and $2.16 million respectively from these cruise ship arrivals. Opportunities , Kangaroo Island has some of the most iconic and breath-taking scenery that South Australia has to offer. We are committed to increasing our tourism and visitor experiences without sacrif icing what we love most about the Island - its isolation and pristine environment., The Hon. Ian Hunter MLC Minister for Sustainability, Environment and Conservation 18 Revenue and growth will continue to increase with 10 cruise ship visits (with a ship capacity of 18,930 passengers and crew) already under way for the 2015-16 season. The 2016-17 season is expected to host 19 visits with a ship capacity of 37,835 passengers and crew.1 • Continue marketing the Island with a focus on nature and wildlife, local food and beverage offerings and leisurely lifestyles. • Leverage Tourism Australia’s Coastal and Aquatic campaign, launched early in 2016, to provide international marketing opportunities for tourism businesses. • Increase marine-based tourism such as fishing charters, diving and sailing allowing visitors to experience marine wildlife in their environment. • Introduce soft walking trails that encompass coastal vistas, farm gate and cellar doors and expose visitors to Kangaroo Island history. 1 AEC Group (2015) Economic Impact Assessment of the Cruise Shipping Industry in Australia 2012-2015, September 2015. Growth through innovation Agriculture Kangaroo Island is home to nearly 300 farms producing wool, prime lamb, cattle, legumes, free range eggs, seed potatoes and marron. There are about 438,000 sheep and lambs and 17,000 head of beef cattle. 81,000 chickens on the Island produce around 12.5 million eggs annually. Of the 245,000 lambs born each year, 75,000 are merino lambs for the production of merino wool for garments highly sought after in countries such as Japan. Some of this wool is used in branded Kangaroo Island Wool garments with full traceability back to individual farms. Sheep and cattle producers supply major processors with prime lamb and beef, which is exported around the world. Kangaroo Island farmers have responded to an increasing global demand for clean, traceable goods. They are blessed with a remarkable agricultural setting and unpolluted air in an environment protected from many diseases and pests. They can grow non-GM produce in an idyllic temperate climate, and it shows in their products. , Kangaroo Island,s pristine environment epitomises South Australia,s clean, green reputation. Our moratorium on the cultivation of genetically modified food crops offers a unique and prized farming environment, with growing opportunities to embrace innovative farming practices and sustainably achieve greater productivity., The Hon. Leon Bignell MP Minister for Agriculture, Food and Fisheries 19 • Kangaroo Island trials on beans, canola and grain to achieve increased yield and productivity. Island farmers have a unique connection to their natural environment, balancing the elements, sustainability and conservation with traditional farming practices and innovative new technology. The Island also produces certified seed potatoes that are used to produce commercial potato crops in other potato growing regions, as well as grains and various other crops. Kangaroo Island’s crop growers market canola and beans internationally under the Kangaroo Island Pure Grain brand. Almost 4,000 tonnes of canola, 14,000 tonnes of wheat, 5,000 tonnes of beans and 3,000 tonnes of barley produced on the Island. Opportunities • Increase productivity, availability and breadth of Island produce to meet increasing domestic and tourism demand; together with supply of high value, high quality produce to key markets in Australia to cement and build further the Island’s reputation for sustainable food production. 20 • Meeting the increasing demands for Kangaroo Island produce internationally such as Kangaroo Island’s non-GM Pure Grain, and wool. There is opportunity to add other KI products to this export channel. • Expanding feedlot practices, or supplementary feeding of lambs to improve continuity of supply. • Further develop seed potato exports. • Develop a small kill facility on the Island to facilitate cost savings for farmers and to improve the promotion and sale of branded Kangaroo Island lamb, beef, pork and poultry. • Further development of the Island’s niche products including honey and bee products, medicinal plants and oils, fruit and nuts (including from native plants). • Expand organic and biodynamic food production on the island to meet growing consumer demand, to increase profitability, and to capitalise on the Island’s clean and green image. • Continue to trial and showcase innovative technology and practices that increase sustainability and profitability. , Young farmers are returning to Kangaroo Island bringing new ideas, technology and business acumen focussed on the prof itability of a farming business. Research is increasing farm production with flow on effects to local employment and service industries., Carly Bussenschutt Chair of Agriculture KI We’re the best place to do business Kangaroo Island as a Head Office for Business Kangaroo Island has two principal drivers to increase Gross Regional Product (GRP) growth on the Island – tourism and primary production. A lateral opportunity for increasing GRP is to identify businesses that could consider relocating their Australian Head Offices to the Island. Businesses that could create head offices or offer services on the Island might be those that are not resident population-dependent and/or those based in the ‘virtual’ world. Bringing new businesses to the Island will increase the number of Island-based residents – expanding the local economy, creating new employment opportunities, enhancing profitability of existing businesses and encouraging diversification and competition. The social capital that will arise from in-bound migration will have positive impacts on a variety of comunity activities on the Island including volunteering, sports, arts and crafts. ,With advances in global connectivity businesses can now reach markets from any location. For an environmentally focussed organisation, Kangaroo Island presents a unique location to do business and an unusual market edge attracting international attention., Peter Clements Mayor for Kangaroo Island Council 21 Opportunities Housing Develop feasible incentives and marketing strategies between the Kangaroo Island Council, the private sector, South Australian and Australian governments to investigate opportunities for relocating business head offices to Kangaroo Island. With proposed developments taking place on the Island, it is expected housing infrastructure will need to increase to accommodate future growth. ,The Government,s business tax reforms are making South Australia the lowest taxing state in the country and the best place to do business. With the economic development taking place on Kangaroo Island, these nation-leading reforms will assist businesses to achieve growth and create new jobs., The Hon. Tom Koutsantonis MP Minister for State Development In 2011, Kangaroo Island’s population was 4,513.2 An additional 1,510 people are expected to be added to the population by 20363, however this figure does not account for the 300 estimated jobs that will arise from the major developments set to roll out on the Island over the next 3-5 years and the short and long-term residents that developments will attract through employment and business prospects. Currently within townships, there are large tracts of land already suitably zoned for urban growth, notably at Kingscote, Penneshaw, American River and Parndana. Opportunities Investigate opportunities to redevelop public and private housing on Kangaroo Island to meet the social needs of the community and to cater for increased employment in the construction industry and future in-bound migration. 2 Australian Bureau of Statistics (2013) National Regional Profile: Kangaroo Island (DC) (Local Government Area 27 May 2013. Classification Code: LGA42750. 3 Government of South Australia (2011: p 44) Kangaroo Island Plan: A volume of the South Australian Planning Strategy, Department of Planning and Local Government. 22 ,With future growth expected on the island for both residents and businesses, our goal is to ensure that government infrastructure supports everyone,s needs on the island. Kangaroo Island,s population will increase as it meets the demands of the economic development occurring on the island. Housing infrastructure and associated services are also required to meet growing demands from in-bound migration and tourism., The Hon. Stephen Mullighan MP Minister for Housing and Urban Development Minister for Transport and Infrastructure Telecommunications Opportunities For businesses to grow on the Island there is a clear need for access to low-cost, high-volume, reliable data and voice communication. • MIMP Connecting Solutions could extend their dedicated service to other government agencies on the Island potentially leading to access for rural communities north, south and west of Parndana. Voice communication is principally a Telstra service with some Optus infrastructure now being deployed. Data services are provided by Telstra and MIMP Connecting Solutions with the NBN providing fixed wireless services to the Island’s townships via a microwave backbone and provides satellite access for the rest of the Island. Whilst MIMP Connecting Solutions has a scalable system that can value add to the existing Telstra solution, more work is needed to ensure services, like the one provided by NBN, are comparable to the services offered on the mainland. • Fibre optic cable to be integrated into the replacement undersea power cable which can then be leased to telecom providers to connect mainland fibre into on-Island fibre replacing/supplementing the existing microwave links. This would provide significant benefits to all operators in their ability to expand speed, reliability and services for the community and visitors alike. 23 Promoting our international connections and engagement International Trade South Australia has participated in Australia’s uninterrupted growth for the past 25 years. Consistent with this growth, the value of South Australia’s exports increased by over 140 per cent over a ten-year period to reach $11.7 billion during calendar year 2015. Trade and investment flows continue to show the rising importance of emerging economies as economic partners for Australia, and their continued expansion offers scope for greater trade and investment growth. Despite the tough global trading environment, growth in Australia’s major trading partners has held up well with economies such as China becoming increasingly important as sources of foreign direct investment. Kangaroo Island products are being exported to Japan, China, America and other parts of the world but there are opportunities to increase export and promotions around tourism and student experiences. Growth in services exports over the past 10 years has been driven by international demand and opportunities. South Australia’s largest service export in 2014/15 was educated-related travel at the cost of $1.1 billion, an increase of over 18 per cent over the previous financial year, while the exports of business-related services stood at $439 million in 2014/15, growing at an average rate of over 10 per cent per year for the past five years. 24 The Commissioner for Kangaroo Island is currently working to develop a business case for establishing an international tertiary education program on the Island that would provide a vocational training facility and accommodation for visiting students. The curriculum could include agriculture, horticulture, viticulture, aquaculture and environmental management and draw on the expertise of local operators. An already established international connection with Kangaroo Island would support such a project and would strengthen South Australia’s international engagement. The Australian Government has five national investment priorities: Agribusiness and Food, Resources and Energy, Major Infrastructure, Tourism Infrastructure and Advanced Manufacturing, Services and Technologies. Kangaroo Island is well positioned to cater to these priorities, particularly in Agribusiness and Food and Tourism Infrastructure. Opportunities • Explore options for establishing international tertiary education on Kangaroo Island. International and domestic students could access a range of educational resources and experiences on the Island drawing on local expertise. • Kangaroo Island has the opportunity to capitalise on international free trade agreements and explore the export of high-quality produce internationally. ,The South Australian Government is determined to grow the State,s economy and create jobs on the back of a strong international engagement program. Supported by Business Missions Program, Investment Attraction South Australia and export assistance; we will continue to attract investment opportunities and capitalise on soaring global demand for our local goods and services. There are opportunities to build on Kangaroo Island,s strong international connections and reputation through continued investment and attracting new economies., The Hon. Martin Hamilton Smith MP Minister for Investment and Trade 25 Access to capital and global markets for small businesses Transport/Freight As part of the construction and operation of developments taking place on the Island, there is anticipated demand for efficient transport and freight options. The transport of construction materials, goods and consumables to service these developments opens opportunities for freight providers to meet a growing demand. In addition there is a significant quantity of freight (grain, fertiliser, livestock etc) associated with Kangaroo Island agricultural production that currently needs to be transported to the mainland via the existing ferry service and then onwards to mainland export ports. With forestry harvesting about to commence there is an opportunity for the development of a port and associated facilities to accommodate bulk and break bulk shipping services to enable direct import/export from the Island. Discussions and investigations examining the feasibility and operation of such facilities are currently under way with the owners of the forestry operations on the Island. The recently announced Federal and State government funding of $18 million to upgrade the Kangaroo Island Airport will allow larger passenger aircraft, and support expanded airfreight capacity between the mainland and the Island. This is likely to be of benefit for the Island’s higher value food producers. The South Australian Government has been working with the Kangaroo Island Council to source funding for the maintenance and upgrade of the Island’s road network. A $2 million per annum grant has been provided to Kangaroo Island Council since 2011 to contribute towards the upgrade and maintenance of the 1300kms of unsealed local roads – just 237 km of the Island’s road network is sealed. Both the Playford Highway and the Hog Bay Road (main road-link between Penneshaw and Kingscote) will undergo shoulder-sealing to enhance capacity and improve safety for freight, wildlife and tourists, including cyclists. Sealink, with the support of the South Australian Government, has recently upgraded the Penneshaw ferry terminal to improve visitor experience. 26 The State Government has invested in improvements to the small craft landing structure on the Penneshaw Jetty which provides the ability to better serve the Island’s growing visitation from the cruise ship market. Opportunities • With the upgrade of the Kangaroo Island Airport allowing direct flight services to east coast markets and international gateways in larger operating aircraft, there is a significant opportunity for export of produce by air. • Development of the proposed resort and marina at American River may also open up new opportunities for transport, with the introduction of a new ferry service between Kangaroo Island and the mainland. • Development of port and facilities to accommodate bulk and break bulk shipping services to export product directly from the Island. ,The South Australian Government will continue to work with the Kangaroo Island Council and its businesses to source funding for the maintenance and upgrade of the Island,s transport and freight network - creating opportunities for businesses, improving safety and boosting the Islands tourism., The Hon. Stephen Mullighan MP Minister for Housing and Urban Development Minister for Transport and Infrastructure 27 Resources Investment and Infrastructure Export Partnership Program Business KI The Export Partnership Program (EPP) assists local businesses to access new global markets through marketing and export development opportunities by providing grants of up to $50,000 over a two-year period to cover market research, marketing material development, training, website development, trade show and trade mission participation and other export-related activities. Business KI is the peak industry body representing businesses on KI seeking to further the economic development and prosperity of Kangaroo Island businesses. www.businesskangarooisland.com.au Kangaroo Island Industry and Brand Alliance The Kangaroo Island Brand Alliance is a regional industry alliance with a charter to undertake collaborative initiatives to grow Kangaroo Island’s regional prosperity. www.authentickangarooisland.com.au/ kangaroo-island-brand-alliance Department of State Development Business Missions The Department of State Development runs a Business Missions Program which assists South Australian enterprises to identify export opportunities, secure new business and meet potential investment partners in target markets. The Business Mission Program for 2016 includes visits to the China, India, North Asia, South East Asia, Europe, the UK and the Middle East. 28 TradeStart The TradeStart Program combines the resources of the Department of State Development and Austrade to assist small and medium sized businesses to develop their export potential. TradeStart Advisers have access to a full range of worldwide resources and services to assist and support their clients so that they achieve long-term success in international business. Department of Planning, Transport and Infrastructure Transport Infrastructure The Department of Planning, Transport and Infrastructure (DPTI) can provide up-to-date information regarding State Government investment of transport infrastructure and services in accordance with the Integrated Transport and Land Use Plan (ITLUP) (refer to www.transportplan.sa.gov.au). DPTI can provide advice and work with prospective developers to assess transport needs to support development proposals, including heavy vehicle access. Building, Development and Major Development Applications The South Australian Government’s website www.sa.gov.au provides resources and information on planning policies, development applications and processes and other resources that will assist prospective developers. Major Development Applications and Assessments www.sa.gov.au/topics/housing-property-and-land/ building-and-development/building-and-developmentapplications/major-development-applications-andassessments Building and Development Applications www.sa.gov.au/topics/housing-property-and-land/ building-and-development/building-and-developmentapplications/development-applications Investment Attraction South Australia The South Australia Government recently launched Investment Attraction South Australia. Its mandate is to attract capital investment to growth sectors, to help establish new operations of international firms and to accelerate investment proposals that create jobs and grow the South Australian economy. www.statedevelopment.sa.gov.au/investment/ investment-attraction-south-australia South Australian Tourism Commission Agriculture, Food and Wine South Australian Tourism Commission (SATC) is available to support and encourage investment on priority infrastructure projects that are financially and environmentally sustainable. AgInsight South Australia Tourism South Australian Tourism Commission SATC aims to facilitate appropriate and sustainable tourism product that builds on South Australia’s key strengths with a focus on three main areas: • Aviation Development – partnering with Kangaroo Island Council, Adelaide Airport Ltd and government agencies to deliver effective business cases to airlines. • Cruise Development – investing in infrastructure, building strong partnerships and engaging with cruise lines, and key government and private bodies to deliver cruise itineraries that are new and dynamic. • Experience Development – increasing the range and quality of tourism experiences suitable for our priority target markets. Tourism KI Tourism KI can provide information for current and prospective tourism businesses about the Kangaroo Island tourism industry, visitation statistics and visitor information. www.tourkangarooisland.com.au AgInsight South Australia provides access to natural resource data enabling investors to research South Australia’s environment and natural attributes that support agricultural production and underpin investment. www.aginsight.sa.gov.au Food Innovation Australia Limited Food Innovation Australia Ltd (FIAL) was established to foster commercially driven collaboration and innovation in the Australian food and agribusiness industry. FIAL are industry led and take a collective approach to ensure productivity, profitability and resilience in our food and agribusiness sector. www.fial.com.au Kangaroo Island Food and Wine Association The Kangaroo Island Food and Wine Association supports food and beverage businesses operating on the Island, to maintain the Island’s reputation for high quality produce and encourage sustainable production which respects KI’s natural environment. www.eatdrinkki.com.au/the-association Agriculture KI Agriculture KI is Kangaroo Island’s peak primary producers organisation that support agricultural development on Kangaroo Island including, research, policy, education and advocacy. www.agki.com.au 29 Food Innovation programs are: • Northern Adelaide Food Park • Premium Food and Wine Co-Innovation Cluster Program • Advanced Food Manufacturing Grants Program Primary Industries and Regions South Australia – Food Innovation Centre The SA Food Innovation Centre has been established to maximise future opportunities for South Australia’s food and beverage industry by supporting innovation and encouraging commercialisation of new ideas and products. A coalition of industry leaders, State Government agencies, universities and research organisations have joined together to establish the centre. www.pir.sa.gov.au/primary_industry/industry_support/ food_innovation/sa_food_innovation_centre/food Primary Industries and Regions South Australia – Food Innovation Program Primary Industries and Regions South Australia’s (PIRSA) Food Innovation program supports the development of high-value food manufacturing in South Australia. Food Innovation programs bring together government, universities, research agencies and the food manufacturing industries, to help turn research into real products or apply new or improved manufacturing solutions to products. These programs will connect food manufacturers with opportunities and research that is market-ready. 30 • A Study into the Functional and Luxury Food Value Chains in Asia and Australia including Foresights The South Australian Research and Development Institute (SARDI) - Food Safety and Innovation SARDI Food Safety and Innovation Science Program offers scientific and technical expertise including innovative technologies for process optimisation and value-adding throughout the supply chain. www.pir.sa.gov.au/research/research_specialties/ livestock_and_farming_systems/food_safety_and_ innovation Manufacturing Technology Department of State Development Manufacturing Works Grants program A range of grants are available to assist businesses adapt and transform technology, business models and efficiencies in manufacturing technology including food manufacturing systems. www.statedevelopment.sa.gov.au/industry/ manufacturing Commercial Fishing Primary Industries and Regions South Australia Commercial fishery and aquaculture operators are required to be appropriately licensed. This ensures the long-term sustainability of fish populations and environmental health of aquaculture leases. Two fisheries officers are located on Kangaroo Island to assist fishers with licensing and catch reporting requirements. www.pir.sa.gov.au/fishing/commercial_fishing/fisheries General Information The Office of the Commissioner for Kangaroo Island The Office of the Commissioner for Kangaroo Island is able to provide further information regarding this document, current and prospective developments, and projects being undertaken to support economic growth and job creation on the Island. The Office is also able to provide resources to support investment and development and connections to Kangaroo Island businesses, Industry Associations, the Kangaroo Island Council, and within government. www.kangarooislandcommissioner.sa.gov.au Acknowledgements The Kangaroo Island Economic Development Outlook was produced by the Office of the Commissioner for Kangaroo Island in partnership with: • Agriculture Kangaroo Island • Business Kangaroo Island • Department of the Premier and Cabinet • Department of State Development • Department for Education and Child Development • Department of Primary Industries and Regions South Australia • Department of Planning, Transport and Infrastructure • Department of Environment, Water and Natural Resources • Investment Attraction South Australia • Kangaroo Island Community Education • Kangaroo Island Council • Kangaroo Island Industry and Brand Alliance • Kangaroo Island Food and Wine Association • South Australian Tourism Commission • Tourism Kangaroo Island Office of the Commissioner for Kangaroo Island June 2016, FIS 24703
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