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Kiwi manufacturing influx into Thailand

By Karlene Davis, New Zealand Trade and Enterprise Thai airports will soon experience a smoother, more efficient flow of baggage and cargo handling, while greener vehicles will run on the country’s roads in the near future, thanks to two Kiwi companies who have secured partnerships in Thailand. DieselGas, specialising in dual fuel technology, have developed electronic conversion kits that allow vehicles to switch between using diesel and gas, while baggage-handling specialists Glidepath provide design, manufacture and implementation services – useful as Thailand upscales airport infrastructure. Glidepath and DieselGas’s respective partnerships with Thai companies aren’t surprising given Thailand’s heavy concentration on automobile manufacturing for export in the ASEAN (Association of Southeast Asian Nations) market. The manufacture of electronic goods is another huge area. Other New Zealand companies considering Thailand need only look to the country’s projected continual growth for 2010. Foreign Direct Investment here increased to NZ$9.85 billion in the first half, and this is set to accelerate in 2011. From an economic standpoint, Thailand hit a 15-year high with 12 percent growth in the first quarter for 2010, while GDP growth for the second quarter was equally strong at nine percent year-on-year. In fact, Thailand’s first half of 2010 alone saw its best two consecutive quarters of growth since 1995, despite political turmoil. Though disruptive, the roads, ports and most businesses remained unaffected and in September, the Thai finance ministry raised its 2010 forecast for the third time in six months. This presents further opportunities for New Zealand manufacturers. Like most of Asia, Thailand is also looking to reduce greenhouse emissions and is keen to identify low-carbon projects that may be eligible for the Clean Technology Fund, one of two Climate Investment Funds, which helps developing countries transform their industries to produce less carbon emissions. DieselGas’s entry into the Thai […]

The future of shipping is in the hands of industry

An industry-led approach to the rationalisation of ports in New Zealand, as recommended in a government-commissioned maritime freight report released today (Wednesday 13 October), is welcomed by the Employers and Manufacturers Association Northern Inc (EMA). EMA welcomes the Minister of Transport’s response today to the report from the NZ Institute of Economic Research that the Ministry commissioned, says EMA chief executive Alasdair Thompson. He says, “It would not be in New Zealand’s best interests for port companies in New Zealand to fail to rationalise if that resulted in New Zealand’s hub container port being in Australia. “So yes, there are issues that need to be addressed. “But we have some time on our side to achieve that rationalisation.But there is a risk in leaving it to our port companies to react to future decisions by shipping lines about where they call, as the necessary commercial decisions may not be easy to make for ports that are largely owned by councils, or in Auckland’s case where the port is wholly owned by the Auckland Council from 1st November. “The current owner of the Ports of Auckland (POAL), which is the Auckland Regional Council (ARC), regards the POAL as an investment from which to receive dividends to fund the ARC. The majority of the newly elected Auckland councilors including the new mayor Len Brown, seem to think the same. They see no room for any private shareholding, which could release capital for investment in public transport. “Nor was the ARC willing to consider rationalization when the Port of Tauranga and the POAL began discussing it some two to three years ago. “Rationalisation could well see the likes of the Auckland Council having to stump up ratepayers money for development capital were it needed to meet the needs of becoming a hub port […]

Internationalisation success will drive New Zealand’s prosperity

The New Zealand Institute has released a discussion paper titled A goal is not a strategy: Focusing efforts to improve New Zealand’s prosperity. The paper concludes that efforts to improve economic prosperity should focus on improving the drivers of labour productivity, growing exports of differentiated goods and services, and helping firms overcome the barriers to internationalisation. Economic prosperity is a worthwhile goal for New Zealand and Government has set a goal of matching Australia’s GDP per capita by 2025. The main driver of GDP per capita is labour productivity and New Zealand’s private economy labour productivity is 57% of Australia’s. Labour productivity is not the only important measure of economic performance though. For a small trading nation exports are very important too. New Zealand’s exports have grown much more slowly than the OECD average partly because global trade in commodities (where New Zealand exports are concentrated) has grown more slowly than trade in differentiated goods and services. In recent years weakening trade performance has combined with imported private debt to erode the current account balance. Now New Zealand needs to improve labour productivity and grow exports enough to reduce the debt load and increase prosperity. Lifting labour productivity depends on improving the drivers of labour productivity; entrepreneurship, innovation, skills and talent, investment, and natural resources. For some drivers New Zealand has made choices that differ from those made in other advanced economies and there is good reason to believe that those choices have eroded relative economic performance. New Zealand is fortunate that there is great potential for improving performance on the labour productivity drivers. New Zealand’s most important sectors for exports are tourism, agriculture, and manufacturing. All three sectors have average or lower than average productivity so simply growing these activities without also substantially lifting productivity would not lift GDP […]

Manufacturing sales defy downturn

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during September 2010, shows total sales in August 2010 increased 20% (export sales increased by 37% with domestic sales increasing 13%) on August 2009. The NZMEA survey sample covered NZ$493m in annualised sales, with an export content of 36%.Net confidence rose to 40, up from 30 last month. The current performance index (a combination of profitability and cash flow) is at 107.5, up from 103.5 in July, the change index (capacity utilisation, staff levels, orders and inventories) went down to 100 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.75, down on July’s result of 105.5. Anything less than 100 indicates a contraction. Constraints reported were 80% markets, 10% capital and 10% skilled staff. Staff numbers for August increased year on year by 7%. “August has shown a great improvement in export sales. Again it is not across the board, but the last couple of survey results have been very encouraging. It is worth noting that several manufacturers who had particularly weak results at this time last year have had a very strong month this year, perhaps overstating the sales growth result,” says NZMEA Chief Executive John Walley. “Growth is largely from manufacturers exporting to Australia and Asia where growth has continued despite the global recession. Those exporting to the United States and Europe are having a hard time with volume and margin.” “We have seen terrible numbers from manufacturing in the June quarter GDP statistics so it is pleasing to see more up to date figures showing some improvement since then. Confidence and index numbers have remained in positive territory.” “Staff numbers have grown for the fourth successive month.”While the numbers have been improving over the […]

Transpower, lines companies out of touch with customers

Business has been struck almost speechless at the lack of sensitivity of Transpower and other lines companies. Transpower and partners have gone to the Commerce Commission asking for a green light to raise their prices so they can guarantee themselves an almost 12% pre tax, risk free return on capital to upgrade the grid. “Every other business in New Zealand would be very happy to be earning over 8% after tax on their capital right now,” said Alasdair Thompson, chief executive of the Employers and Manufacturers Association. “For a government owned monopoly to request a 12% risk free rate of return shows Transpower has lost touch with its customers,” Mr Thompson said. “The request is to increase prices so they can expect over 8% return on capital after tax, which equates to nearly 12% before tax. ‘The transmission upgrades are necessary and will be paid for by a mix of shareholder funds and borrowing which has to be paid off from future profits boosted by price increases. “But monopolies extracting the sort of return that Transpower wants must be reined in by the regulator. The price increases being sought are grossly unreasonable in a flat and struggling economy. “Business and residential customers alike will be watching closely the outcome from the Commerce Commission.”

CADCAM software used here for implants

A range of Delcam’s CADCAM software, in particular the latest release of the CopyCAD Pro reverse engineering system, is being used by a group of companies in New Zealand to design and manufacture custom-made maxillofacial implants for patients suffering with tumours or major bone loss. The overall process, which is managed by Computer Generated Implants Ltd, has improved the quality of the results and the speed of recovery. Most of the recent cases have involved patients who have had tumours removed some time ago. Typically, the reconstructive surgery carried out at the time involved a bone graft using a shaped portion of patient’s fibula. Aesthetic outcomes were often poor and the patient also had to endure a lengthy period in a leg plaster cast while the fibula healed. in these cases, there was little requirement to design and manufacture implants in a short time frame. However, for so-called ‘hot cases’, the priority is to dramatically shorten the overall lead time. Ideally, the surgeons would like to operate well beyond the margins of the tumour and insert the custom-made implant in the same procedure. “We had been using Delcam’s CopyCAD and PowerSHAPE successfully for many years for the design of these types of implant,” explained a spokesman for the group. ‘The results have been good but the process required a high level of modelling skill and could take days or weeks. This was not a real problem for historic cases but we really needed to shorten the lead time for the process. The new CopyCAD Pro release has proved much easier to use and enables us to confidently take on “hot cases’ now. It is a huge and important leap forward.” The process used by the New Zealand group begins when patient data in either a CT or MRI scan is […]

Riding high on success

FrameCad, a construction technology company, founded by chief executive Mark Taylor more than 20 years ago, found the recession obliterating construction technology sales in the United States. It could have been devastating for the Auckland-based company, except that FrameCad had recently set up a Middle East office with the assistance of New Zealand Trade and Enterprise’s Beachheads programme. Just two and a half years after opening, the Dubai office now accounts for 50 per cent of FrameCad’s revenue. A great turnaround story! Able-X, a computer game-based arm rehabilitation device developed by IRL’s Assistive Devices Team in Christchurch, recently won first prize in the prototype category of the 2010 Engineers Australia, College of Biomedical Engineering Better Technology Awards. The device is suitable across a range of disabilities, from severely paralysed to almost able-bodied. Another terrific story! These are but two examples of success through innovation which is keeping New Zealand expertise prominent on the world stage. We also take a look at the finalists in the 2010 New Zealand International Business Awards, which recognise new approaches that businesses are taking to achieve internationally. And there is a sneak Preview of FoodTech Packtech being held at ASB Showgrounds, Ellerslie in October. So once again, we’re getting high on the positive; developments in manufacturing presented to you as case studies, company profiles and as a smorgasbord of articles for you to read. Rich in content to inspire your future success. -Doug Green

Young Engineer of the Year finalists announced

The Young Engineer of the Year is the most hotly contested title in the New Zealand Engineering Excellence Awards stable. The 2010 judging panel were flooded with entries of a uniformly high standard. In the final component of the competition the three finalists will each be required to showcase their communication skills by giving a short public presentation on an engineering project of their choice. The 2010 Young Engineer of the Year Finalists are Brendan Donnell, Matthew Lander and Anna Robak. Brendan Donnell is a Structural Engineering Team Leader at Sinclair Knight Merz. Brendan won the Senior Prize in Civil Engineering in his final year at Auckland University. Joining SKM after graduation in 2002, Brendan has been a key player in many high profile projects including the Forsythe Barr Stadium in Dunedin and the Victoria Park Tunnel Early Works Package. Matthew Lander is an Associate – Structural Engineering at Beca Carter Hollings and Ferner in Wellington. He has a special interest in the integration of structure with architecture and tutors students at the School of Architecture on structural engineering, as well as working with colleagues at Beca to improve their understanding of architectural values. Matthew was the Structural Engineering Manager for the new BNZ building on Wellington’s waterfront. The wider project team included CentrePort and BNZ, Fletcher Construction, Jasmax, Tonkin &Taylor and the Beca building services and fire teams. Anna Robak was the Opus Young Achiever of the Year in 2008 and is currently employed there as an Environmental Asset Manager focussing on economic evaluation. Anna is also currently pursuing doctoral studies to evaluate the economic, environmental and social costs and benefits of water supply systems, with particular emphasis on trade-offs between public health benefits, environmental impacts, and wider economic benefits. A champion rower, Anna is a Futureintech Ambassador working […]

OCR Damage Continues

The Reserve Bank seems to have recognised the weaknesses in our trading partners that should have prevented any Official Cash Rate (OCR) hikes until this point, but has not found the resolve to reverse earlier hikes. The two hikes have and will continue to reduce growth in the export economy say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive John Walley says, “There has been talk of further quantitative easing in the United States, and the Bank of Japan has just intervened in currency markets to bring down the value of the Yen. We will see our growth prospects continue to suffer while these comparisons are ignored.” “Debt has become the dominant force in the economy with businesses and households choosing to retire debt rather than invest or consume. This means lower inflationary pressure over the medium term. “This begs the question: why has monetary policy stimulus been removed? The tradeable sector has never been an inflation driver, and with the domestic pressure gone there is no reason to inflict damage on the tradeable sector. As we have said previously, pride should not get in the way of a prudent decision. “The message is simple; we will not see new export investment leading the recovery with the dollar at 72US cents.”

Emergency Shutdown – Who pays the workers?

By Claire Parkes, Managing Director, Clarian Human Resources Many businesses in Christchurch are quickly coming to terms with how to handle their staff resource while their operations are fully or partially closed down. There’s lots of information hitting the media, so let’s cut-to-the-chase with the essentials. 1. Look at your employee agreements – is there anything written about what actions will take place in the event of an emergency or temporary shut-down of operations? If so, you will need to follow these. 2. Are your employees on a fixed number of hours per week or can they be varied on demand i.e. casual agreements? If the hours are fixed, you will need to pay them for hours normally contracted for if they are fit and able to undertake the work. 3. Check your insurance – does it cover payment of wages in this situation? 4. Ask employees if they would be willing to take annual leave during the shutdown period (but be aware that they do not have to oblige where you have not given them 14 days notice). 5. Consider allowing your employees to work from home or another appropriate building if access is possible. 6. Be open with your employees about the financial strain the situation has put on the company and see if you can come to some kind of mutual agreement about reduced hours over a certain timeframe. 7. Direct your employees to compensation through WINZ for loss of income and basic necessities (see http://www.workandincome.govt.nz/individuals/a-z-benefits/civil-defence-payment.html) 8. Contact the Chamber of Commerce to see if you are eligible for compensation recently announced by the government. 9. Ensure you are continuously checking the suitability of your office space against health and safety regulations. 10. Consider whetherÊimprovements to your policies and agreements to cover for any future emergencies can […]

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