Business News

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 […]

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during June 2015, shows total sales in May 2015 decreased 9.13% (year on year export sales decreased by 7.59% with domestic sales decreasing 11.20%) on May 2014. The NZMEA survey sample this month covered NZ$397m in annualised sales, with an export content of 58%. Net confidence fell to -13, down from 17 in April. The current performance index (a combination of profitability and cash flow) is at 96.3, down from 100.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 100, up from 98 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 102.5, down on the last result of 105.67. Anything over 100 indicates expansion. Constraints reported were 81% markets, 13% production capacity and 6% skilled staff. Net 13% of firms reported a modest rise in productivity in May. Staff numbers for May increased 1.20% year on year. Tradespersons, supervisors, managers, professional/scientists and operators/labourers all reported a moderate shortage. “May’s results showed a turn around in the recent positive trend for domestic sales, moving into year on year reductions in turnover after five months of year on year expansion. Export sales also fell into the negative after two months of good year on year increases. We hope this month’s results are just a temporary blip, rather than a negative trend, however the results are relatively in line with other recent business surveys.” says NZMEA Chief Executive Dieter Adam. “This month’s survey saw confidence moving back into the negative, after breaking into the positive last month. The performance index fell into contraction territory (below 100), and the forecast index, despite falling on last month, stayed in expansion. Staff numbers increased year on year, but more […]

On the release of the report – The State of CSR in Australia and New Zealand Annual Review 2015 – Sustainable Business Council Executive Director Penny Nelson said: “We have seen a significant shift for New Zealand businesses over the past year. Increasingly, leaders are bringing sustainability into the heart of their organisation’s strategies. “A growing number of businesses are looking beyond sustainability as compliance or risk management and are seeing growing opportunities from embedding good business practice. The State of CSR report suggests that business innovators are tackling social and environmental issues because it creates both financial and non-financial value for them. “According to the report, innovators are more likely to prioritise addressing issues like poverty, inequality, human rights and the environment. They understand the close connection between their own long-term success and having healthy communities and ongoing access to natural resources. You can’t have one without the other. “It was interesting to see that overall, New Zealand businesses are more focused on environmental goals than Australian companies, yet less concerned with social issues. I think there’s growing awareness among New Zealand businesses of the important role they have to play in areas like youth unemployment and poverty. This will be an area to watch.”