Business News

The composites market is booming with an average of +6% growth per year since 2010. With a growing demand for better environmental impact reduction and costs savings, composites are used more and more often to lighten structures, aircraft, and vehicles in general, thus improving energy efficiency. JEC Group, the largest composites industry organization worldwide, has identified five developments in the market that could grow even bigger by 2030. Indeed, the global composites market represented 81.6 billion Euros (US$108.9 billion) in value for 2012. This market is growing at an average of 6 percent per year. The composites industry is growing in volume in correlation with the increase of gross domestic product by country. And penetration continues in some sectors like Aeronautics. For instance, the Composites market for Aerospace is expected to be 4 times bigger than today by 2030. Also new applications in high volume markets continue to appear for instance in EEE, i.e. Electricity, Electronics & Consumer Goods, especially in Asia. JEC Group has developed a Knowledge & Networking service package including three platforms in Europe, Asia-Pacific, and the Americas to cover the whole composites market. They enable the Group to detect main trends that contribute to the composites market growth. There are five new trends that could change and boost the market, therefore contributing to making it bigger by the next five years. The forecast is 12 Millions of metric Tons by 2017 (compared to 9.2 million metric tons in 2012) Converting processes towards mass production Over the past few years, the composites sector has developed its ability to convert processes, including for large and complex-geometry parts. Large companies have invested heavily in these new technologies, which lower the cost of composite parts (e.g.: thermal curing technology enables mass production in the aerospace and the automotive sectors). Innovation […]

Three prominent companies have committed to establishing bases at Portlink Industrial Park, joining existing tenants such as Kathmandu at the 30 hectare development adjacent to the Lyttelton Tunnel road. The three companies are Christchurch-based NZ Express Transport, Elastomer Products Limited (EPL), and Cla-Val Pacific, a leading manufacturer of automatic control valves. David Mortimer, CEO of Arcus Developments Ltd, which is managing the development of Portlink, said that having three well-known companies confirm contracts within days of each other was ‘quite a coup’. “Each of the companies had its own reasons for choosing the Portlink site,” Mortimer said. “NZ Express Transport first made their interest known to us when we had the land rezoned back in 2009. The location is perfect for them as their core business is container transport. Other lease commitments meant it has been a four-year process for them, but time has only reinforced their confidence in Portlink’s advantages”. Mortimer said that for EPL, which designs and manufactures innovative polymer (plastics and rubber) products, one of the key attractions of the Portlink site was its proximity to the company’s existing earthquake-damaged site and to the majority of its labour force. “EPL was concerned that if they relocated out to the west they could risk losing some of their highly skilled workers, who mostly live in the east of Christchurch,” Mortimer said. “Cla-Val Pacific’s Asia-Pacific operations extend north to Mongolia, west to Pakistan and east to the Philippines,” Mortimer said. “So for them, the decision to situate their Asia-Pacific sales and manufacturing base in Christchurch, specifically Portlink, was due to its ease of access for exporting to clients across the region”. The construction of EPL’s 5,500 m2 warehouse and manufacturing area and 500m2 office is due to commence in the next two or three weeks. NZ Express Transport and […]

The government’s proposal not to ratify Auckland’s Unitary Plan until 2016/17 will load big costs onto Auckland’s ratepayers, and hold back Auckland’s growth, the Employers and Manufacturers Association says. “Business wants Auckland’s Unitary Plan to come into effect (be ratified) this year, not in three years’ time,” said Kim Campbell, EMA’s chief executive. “We understand why Environment Minister Amy Adams wants three years consultation over the myriad of rules and regulations the plan will introduce, but frankly we can’t afford the delay, or the costs of doing this. “The delay will mean uncertainty for business over the next three years, but on top of that the costs to Auckland new home owners and ratepayers will be unnecessarily inflated. “The costs will result from Auckland Council having to manage seven different consent processes under the city’s seven former legacy councils – while introducing the new future looking, single unified process. “This is simply too much to ask. “It will add a significant cost to the building of new homes just when we need them to be cheaper. “The requirement to consult over the Unitary Plan for another three years is included in changes to the Resource Management Act currently before Parliament – it has to be stopped in its tracks. “The issue is the elephant in the room as Mayor Len Brown and Housing Minister Nick Smith discuss today how government and council are to work together on housing. “Business is all for speeding up the development of greenfields and brownfields land so there are more options for affordable housing.”  

The BusinessNZ Planning Forecast indicates a finely balanced New Zealand economy, with positive economic data, but with some risks remaining.  Improved business and consumer confidence, solid growth prospects among New Zealand’s major trading partners, and firm international commodity prices augur well for future growth, says BusinessNZ economist John Pask.  However, risk factors include the ongoing drought which could reduce GDP by as much as $2 billion, and household debt levels that have risen in an environment of low interest rates. Some regulatory issues are also risk factors. “Proposals for new earthquake strengthening standards for buildings are an example of a regulatory approach that could have severe outcomes for the economy. The proposals exhibit poor process with incomplete analysis of the costs of the intended legislation,” Mr Pask said.  “Other aspects of the regulatory environment, such as local government’s slowness in freeing land supply to allow for more affordable housing, and ongoing exorbitant development contribution charges also cause concern.”  The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures. The ECI sits at 18 for the March quarter, up 3 on the previous quarter and up 16 on a year ago. The BusinessNZ Planning Forecast for the December 2012 quarter is on www.businessnz.org.nz    

The fact that New Zealanders continue to recognise the economic and cultural benefits of maintaining ties with Asia, as highlighted by the latest survey from the AsiaNZ Foundation, bodes well for our future says ExportNZ. Executive Director of ExportNZ, Catherine Beard, says “It’s good to see New Zealanders so positive about Asia and our need to engage with the region to boost trade and personal ties. As Asia thrives, so do the opportunities for New Zealand business. “Exports to China alone have increased 70% since 2009 to NZ$5.6 billion. With China set to become the world’s second biggest consumer market and India rivalling the bigger European markets by 2020, our engagement in the Asian region needs to keep up. This starts with education.  “It’s significant that over half of the respondents to the AisaNZ Foundation’s survey believed more needed to be done to help young people engage confidently with Asia, and more needed to be done to help New Zealanders better understand Asian cultures and traditions. “ExportNZ would like to see more emphasis in secondary schools on teaching Asian languages and culture, to prepare the next generation of New Zealanders to take full advantage of what the region has to offer. Australia is making big investments in this area, and New Zealand needs to keep pace.”  

New Zealand’s manufacturing sector continued to show upwards momentum since the start of 2013, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for February was 56.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.1 points up from January and the highest result since February 2012.  BusinessNZ’s executive director for manufacturing Catherine Beard said that it was encouraging to see the February result exhibit stronger activity, most likely due to certain factors in the economy now starting to play out.  “Comments received from respondents who show increased activity are often associated with construction, such as the Canterbury rebuild or increased renovation work throughout the country. Given a large proportion of New Zealand’s domestic manufacturing activity is dependent on the construction sector, stronger demand for products such as paint, concrete, fixtures/fittings and related equipment will obviously provide the sector with a welcome boost.” BNZ senior economist Craig Ebert said this month’s positive result reinforces the bank’s view that manufacturing is not “in crisis”. “The figures speak for themselves. The way some people are talking, we should be witnessing a very weak, to plunging, PMI. In fact, it’s improved to a more positive level. While employment is still lagging, with production being the fastest growing in more than eight years, we have good reason to expect a pick-up in jobs to follow, especially with new orders picking up as well as they are.” All five seasonally adjusted main diffusion indices were in expansion for February, the first time since May 2012. Production (61.4) led the way with its highest result since December 2004. This was followed by new orders (58.2), which recorded its strongest result since February 2012. Employment (50.1) did not display […]

 Callaghan Innovation announces the appointment of Dr Mary Quin, an exceptional New Zealander with an impressive track record of working in the US engineering and technology sector, as the inaugural CEO of Callaghan Innovation. With a background in R&D in materials engineering and over 20 years experience working in senior executive roles in NASDAQ-listed companies such as Xerox and Eastman Kodak Company, Dr Quin comes with an impressive profile and experience in technology and engineering industries. During her most recent tenure at the 2,800-person US support services company, NANA Management Services LLC, where she has been President for the last seven years, she has more than doubled revenues to US$200 million through value creation and diversification. NMS is jointly owned by indigenous Inupiat people of Alaska with whom Mary has worked closely and successfully over a number of years. Palmerston North-born Dr Quin has a distinguished academic background. After graduating from the University of Canterbury with a Bachelor of Science (Honours) with first class honours in Physics, she completed a PhD in Materials Science and Engineering at Northwestern University in Illinois. After working in research and development for engineering company Raychem for several years, she attended Harvard Business School, where she graduated as a Baker Scholar, the highest distinction given for the top 5% of MBA graduates. Dr Quin is also an international bestselling author. Her book, Kidnapped in Yemen, draws on her personal experience of being kidnapped as part of a small tour group over Christmas in 1998 in Yemen. She will begin her new role as CEO of Callaghan Innovation on May 3, 2013. Her main responsibilities will include ensuring that Callaghan Innovation accelerates the commercialisation of innovation of New Zealand firms in order to strengthen export capability and grow New ZealandÕs economy.      

ExportNZ says Callaghan Innovation, the new Crown Entity that is aiming to increase both public and private investment in research to grow more innovative exports, should ensure it is focused on business needs.  Executive Director of ExportNZ, Catherine Beard (left) says while investment in fundamental research remains important, we also need our scientists and researchers to focus on near-term business requirements that are customer led.  “If we want to boost our exports and develop more internationally competitive companies we need to focus on innovation and have a valuable point of difference,” Catherine Beard said.  “Scientists that can get alongside business to help turbocharge an innovative culture will be helping to grow our exports. Ensuring our exporters to have a unique point of difference and can compete at the top end of the market is important. In a relatively high cost manufacturing environment this is the only way we will stay globally competitive. “The proof of success will be increased investment in R & D from the private and public sectors (currently low by international standards), leading to increasingly high-value exports and increased collaboration between our science and business talent.”  

The manufacturing industry appears to be experiencing a revival, which could indicate businesses expect stronger consumer purchasing in the coming months and global supply chains may soon be flooded with additional products.  Global numbers strong  The recently released JPMorgan Global Manufacturing PMI shot up in January, reaching 51.5, the second consecutive month the index has hit above 50, the number which signals growth. Any number below 50 indicates the industry is contracting. Strong numbers may indicate companies are boosting production as they see economic improvement and expect consumer purchasing to increase.  Much of the growth came from emerging markets, according to the report. Countries like Brazil, Russia, India, Turkey and Taiwan saw output increase, which could signal companies are taking advantage of new low-cost production hubs to enjoy lower manufacturing labor costs. “The global manufacturing sector has made a bright start to 2012, with the PMI indicating that output growth recovered to a ten-month high following the soft patch seen during much of last year,” said David Hensley, director of global economics coordination at JPMorgan. “The continued upward trend in PMI orders suggests the PMI, and global production growth, may strengthen further in the next few months.”  Domestic growth also strong However, not all the strong growth came from emerging markets – the U.S. enjoyed significant manufacturing expansion as well. The Institute for Supply Management’s manufacturing index jumped to 53.1 in January, compared to December’s 50.2 – a number that exceeded expectations. This domestic growth is somewhat unexpected, as payroll tax increases are resulting in lower paychecks for most Americans. Some businesses anticipated this could hurt consumer spending, but strong manufacturing trends thus far seem to show otherwise.  Supply chain optimisation Companies producing an increased number of merchandise will need to effectively optimize their supply chains and ensure their procurement […]

All eyes in the metal industry will be on the lookout for a silver lining in the uncertain economic horizon this year as a PwC report out today predicts. Mega deals will dwindle against a surge in smaller announcements according to Forging Ahead, with CEOs holding onto their purse strings.  In PwC’s annual in-depth metals M&A review and forecast, the headline trend is for a continuing recovery from a post credit-crunch low with Asia being the ‘star’ region dominating the 2012 deals market. It accounted for 68% of totals deals value, more than three times the 19% share it held in 2011.  Jim Forbes, global metals leader, PwC, said: “There is no doubt that the industry is facing some of its toughest challenges yet as companies battle the headwinds of ongoing economic uncertainty and unpredictable costs around raw materials and energy. On the surface, we are still seeing some mega-deals but they are fewer and if we created a top 10 of the deals announced and completed in 2012 just half would have been valued above US$1 bn. “We also found through our analysis that the metals sector has experienced a ‘double dip’ downturn in M&A activity with deal numbers outside the Asia Pacific region falling back down to the post-credit crunch low of 2009.” Deal values and breakdowns In 2012 there were 507 deals against 2011’s 531, still significantly above the highest pre-credit crunch volume of 411 in 2007. Deal value for 2012 is also 203.5% higher than the US$15.1bn deal value total of 2009. Completed deal value in the sector was up 20% year on year, rising from US$38.2bn in 2011 to US$45.8bn in 2012. However, the totals for 2012, mask a vast geographic imbalance, said Jim Forbes, PwC’s global metals leader as the Asia Pacific region accounts […]