Business News

The Government’s immigration changes to encourage more skills and entrepreneurs to the regions is a good step forward and will help address regional skill shortages. However, a wider regional growth strategy is needed to bring new life and sustainable growth and opportunities to the regions, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive Dieter Adam says, “The Government’s immigration changes will help encourage a better spread of immigration, skills and talent around the country, while helping address some of the skill shortages in the regions. A better flow of skilled migrants to the regions will help improve the capability of our manufacturing and exporting businesses in the regions, this, along with the announced regional research institutes, are a positive step forward.” “However, a wider regional growth strategy that has a focus on encouraging growth and investment in manufacturing businesses is needed to create sustainable growth, jobs and opportunities that the regions need into the future. “Manufacturing businesses need others around them, a manufacturing eco-system of critical mass to create local supply chains and fuel demand and capability. The risk of slipping below critical mass is even more pronounced in the regions. Dunedin is a good example of this, where the loss of Hillside Engineering and other manufacturers had unfortunate effects on remaining manufacturers who made up parts of related supply chains. “With the regional initiatives already in place, along with a more focused strategy targeting regional manufacturers, the sector can do much more to supply good sustainable jobs and growth for the regions. The fall in dairy prices has outlined the need for more diverse business development in the regions. “Part of this strategy must also be providing the training, education and support required for Kiwis in the regions to gain the skills needed to grow […]

New legislation for health and safety is being made more practical, says BusinessNZ. Changes to the Health and Safety Reform Bill announced today will help small businesses, farmers and others provide safer workplaces, BusinessNZ Chief Executive Phil O’Reilly said. The Bill had been delayed over concerns including the workability of the law in workplaces where non-employees are present, and over compliance issues for small businesses required to have worker participation processes. The draft legislation continues to require those controlling a workplace to do everything reasonably practicable to keep it safe. However, among other areas, it now clarifies that: • The area where work is being undertaken on a farm will be categorised as a workplace, while areas where work is not being undertaken will not be categorised as a workplace. This addresses the concern of farmers being liable for e.g. hunters or trampers present in non-working areas of a farm. • Small businesses with fewer than 20 employees, in lower risk occupations, will still be required to have a worker participation system but will not have to have safety reps unless requested by 5 or more employees. Mr O’Reilly said the amended provisions helped address concerns about unfair liability and compliance for small business. “The new draft Bill also makes clearer the issue of control over a workplace. The ‘person conducting a business or undertaking’ (PCBU), with the primary duty for safety under the new law, will usually be a business entity, such as a company, but may be an individual in the cases of sole trader or self-employed person. This makes it clearer where the primary duty for safety is. “The new Bill also responds to concerns about the weight of penalties where an accident results in death, with provision for guidance to courts requiring them to consider this […]

The Employment and Manufacturers Association (EMA) is welcoming a cross-party political focus on issues affecting small business. EMA CEO Kim Campbell says with three separate parties issuing similar small business tax policies in recent weeks, small business is finally getting some of the attention it needs. “The IRD issued a Green Paper a few weeks ago suggesting ways of easing the provisional tax burden on small business; NZ First followed last week and today we’ve had Labour issue its own policy with a similar focus on easing that tax burden on small business,” says Mr Campbell. “With three parties in alignment, perhaps we can make some progress on changing the way provisional tax is paid. At present the system forces small business to forecast earnings and pay tax on those earnings, often before the money comes in. That’s a heavy burden for a new business and can be quite punishing, so any change is welcome.” Around 97% of all business activity in New Zealand is driven by the small business sector. Mr Campbell says, “Tax is just one area where the burden can be eased in this critically important sector of our economy, but it’s good to see multi-party alignment on at least one issue for the sector.”

New Zealand manufacturing activity increased in June, snapping three months of decline, as a weaker dollar supported exporters in the sector. The BNZ BusinessNZ performance of manufacturing index rose to a seasonally adjusted 55.2, the highest level since February, and up from 52 in May. All components were in expansion, with readings above 50. The performance of manufacturing index has been in expansion for 33 consecutive months. Activity in the manufacturing sector was supported by the decline in the kiwi dollar, which has fallen to a five year low against the greenback, by increasing the value of export receipts as New Zealand’s economic outlook cools on the back of weaker global dairy prices. “The currency certainly appeared to be part of the PMI lift in June with many manufacturers mentioning this positively in their responses, far outweighing a few negative comments in regarding the currency’s drop pushing some input costs higher,” BNZ senior economist Doug Steel said in a note on the survey. Last week, the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion showed the nation’s business confidence plunged to the lowest level in three years in the second quarter as companies became pessimistic about profitability expectations. The survey doesn’t cover the agricultural sector, but looking across the regions the decline in dairy prices was evident, with some dairy intensive regions. “Lower dairy prices remain a clear concern for manufacturers,” Steel said. “We wouldn’t read too much into one month’s result, but it’s encouraging that such activity indicators continue to show growth even though confidence has been dented a bit.” Production returned to expansion last month, with an index reading of 55.7, from April’s 49.1 level. Employment rose to 54.2 from 51.7, new orders climbed to 58 from 52.3 and deliveries increased to 55.1 to 52.7. Finished stocks was the only measure to show a […]

By Doug Green, Publisher, NZ Manufacturer Sam Fulton, Sales and Marketing Director for wire loom manufacturer Fero sees specialist high-tech manufacturers benefiting from New Zealand businesses bringing their outsourced work back from Asia. “It is easy to be beguiled by what on the surface appears to be a low price, but buying at the cheapest price always comes at a cost”. “You get what you pay for in China so if the price too good to be true, then it is”.                          Although its manufacturing is still cheap by New Zealand standards, rising labour and other costs are seeing China become more expensive to do business with. Its manufacturers are off-setting these costs through economies of scale. As a result, minimum run sizes are increasing beyond the reach of many New Zealand manufacturers For every $1 of value added in manufacturing, $1.4 of additional value is created elsewhere in the economy, and every job in manufacturing generates between two and three jobs in the rest of the economy. Money brought in by both high-tech manufacturers and those in the sub sectors. As far as categorising hi-tech manufacturers. Dieter Adam, Chief Executive of the New Zealand Manufacturers and Exporters Association, believes there are many businesses that should be considered high-tech due to their complex and innovative processes and products, but are not captured by the current definition. Hi-tech manufacturing is considered the way to go for growth and innovation in the country. However there is considerable high value-added activity happening across the spectrum of manufacturing businesses. Dieter Adam believes that focussing only on what is defined as high-tech can lead to missing or undervaluing all the innovation and growth that is created in other parts of the sector, just because […]

In the picture -From left to right: MP Jami-Lee Ross, Evergrande Dairy Chairman Mr Xu Wen, Economic Development Minister Hon Steven Joyce, Economic and Commercial Counsellor of the Chinese Embassy in NZ Mr Zhang Fan and Korea Trade Commission Business Manager Ms Kim Kelly. The current dairy business climate is both challenging and promising, because regulations on infant formula are still very sticky and unclear. However, Evergrande Group’s investment into GMP Dairy Limited’s business has given the company more opportunities. Evergrande Dairy chairman Mr Xu Wen has mentioned before the group, which had turnover this year of 131.5 billion Chinese Yuan and has 475 billion Chinese Yuan in assets, was attracted to invest in New Zealand because of its strong reputation for food safety. Evergrande has a large team in China to provide innovative marketing and distributing strategies, which has given GMP Dairy Limited more confidence in developing the China market further. On the 12th of June, 2015, GMP introduced their premium infant formula brand, Opobaby, at the Aotea Centre, Auckland Town Hall. Economic Development Minister Hon Steven Joyce, MP Jami-Lee Ross, Economic and Commercial Counsellor of the Chinese Embassy in NZ Mr Zhang Fan, along with Evergrande Dairy Chairman Mr Xu Wen officially launched Cowala Superpremium Opobaby Infant Formula. Evergrande Group is a massive Chinese conglomerate, which started out in real estate and has diversified into a range of other businesses including fast moving consumer goods. In October, Evergrande launched its infant formula brand Cowala in China where it made its first appearance in a Chinese Super League football match when the successful Guangzhou Evergrande team, part-owned by Alibaba boss Jack Ma, wore Cowala baby formula-branded shirts. The team officially launched the new Opobaby brand in China after a match late last month. A unique competitive point of difference […]

Specialist high tech manufacturers are benefiting from a steady stream of local businesses bringing their outsourced work back from Asia, to New Zealand. Wiring loom manufacturer Fero is one of several businesses that are gaining custom from local companies that have found it harder than originally anticipated to get their componentry manufactured in China. Sam Fulton, Sales and Marketing Director for high tech wiring loom manufacturer Fero, says many returnees had not taken into account the true cost of doing business in China: “It is easy to be beguiled by what on the surface appears to be a low price, but buying at the cheapest price always comes at a cost”. “You get what you pay for in China so if the price too good to be true, then it is. Many Chinese manufacturers reduce costs by compromising the quality of the raw materials in their product. For example, copper wire costs are reduced by using recycled copper, which does not perform to specified standards. This can result in quality problems and high mitigation costs once the component is in use. “It’s a very different way of doing business to New Zealand, so it is easy for local manufacturers to get stung. That is why it is important to shift one’s thinking from unit-based to taking into account the overall cost of doing business,” says Mr Fulton. Although its manufacturing is still cheap by New Zealand standards, rising labour and other costs are seeing China become more expensive to do business with. Its manufacturers are off-setting these costs through economies of scale. As a result, minimum run sizes are increasing beyond the reach of many New Zealand manufacturers. “Even large manufacturers by New Zealand standards can be shocked to find that an order they consider huge by local standards is […]