Business News

New Zealand businesses are not properly managing their supply-side risks, jeopardising billions of dollars in revenue and tens of thousands of jobs, according to a report from the Chartered Institute of Purchasing and Supply, Australasia and accounting firm Grant Thornton New Zealand Ltd. The research, entitled ‘Procurement Risks in New Zealand’, is the first of its kind ever undertaken in this country and looks to benchmark the level of awareness and action related to the assessment, mitigation and management of procurement risks. The survey included about 200 organisations – mostly large corporations across New Zealand. About 75% of the companies in the survey each boast more than 500 employees and over $50 million in revenue, and combined, with more than $7 billion in revenue and 70,000 employees, represent a sizeable sector of the economy. Ross Darrah, Grant Thornton New Zealand Director, Business Transformation,(pictured) said that professional procurement in New Zealand faces specific and rare challenges, both in negating the impact of disruptions on the supply line, and in educating companies of the importance of investing in training of people in this area of their business. “Simply dealing with requirements at the tip of the global supply chain presents challenges but persuading international suppliers to ‘bother’ to supply a first-world market – that often requires only low-volumes – is a challenge in itself. “This issue of supply-side ‘risk’ is a real one for the country. Many of our businesses are reliant on a robust supply line and the consequences of any disruption can be far-reaching.” Numerous recent events, both globally and in New Zealand, have impacted on the supply-side supporting the country. “Two thirds of the organisations surveyed were impacted to a moderate extent by at least one of the recent events andabout a third experienced a high impact from at […]

The Trans Pacific Partnership is of seminal importance for developing job opportunities in New Zealand, says Kim Campbell, chief executive of the Employers & Manufacturers Association. But alongside our ongoing struggle to win access for our agricultural products we need a completely separate work stream dealing with intellectual property, Mr Campbell said. “It is evident that in terms of the TPP, intellectual property is a complicated rat’s nest full of ambiguity and vested interests,” he said.  “Well-resourced groups have the capacity to subvert the TPP process if we are not most careful to ensure it is robust and enduring.  “Hence the need for caution and precision over the agreement’s terms and conditions. “New Zealand business will be paying close attention to the details of this part of the agreement because tomorrow’s globally integrated business world will be driven by intellectual property. “And we are 100 per cent committed to New Zealand negotiating a high quality TPP agreement for the job opportunities and economic growth prospects it can undoubtedly deliver.”  

The Trans Pacific Partnership will help build more successful communities, says BusinessNZ. Speaking at the Trans Pacific Partnership Forum in Auckland today, BusinessNZ Chief Executive Phil O’Reilly said the TPP has the potential to raise living standards around New Zealand.  “This trade agreement goes beyond the 20th Century approach of simply seeking to reduce tariffs and border restrictions.  “It recognises the fact that industry now relies on complex supply and value chains involving producers in many different locations and countries. New Zealand is deeply involved in many international value chains and the TPP will enable more New Zealand businesses to trade more effectively in more countries, and that means increased growth and more jobs for New Zealanders. “The particular value of the Trans Pacific Partnership is that it involves many of the fastest growing economies on earth. Economic growth in the Asia Pacific region is surging and the TPP will help unlock that growth for New Zealand’s benefit. “It’s appropriate that New Zealand’s negotiators are focused on protecting and advancing our interests including public health, intellectual property, the environment, and the Treaty of Waitangi, and success in these areas will mean a high-quality trade deal that is sustainable in the long term,” Mr O’Reilly said.          

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during November 2012, shows total sales in October 2012 increased 7.05% (export sales increased by 1.90% with domestic sales increasing 11%) on October 2011. The NZMEA survey sample this month covered NZ$594m in annualised sales, with an export content of 42%. Net confidence improved to -18, up from the -33 result reported last month. The current performance index (a combination of profitability and cash flow) is at 93.5, down from 98.0 in September, the change index (capacity utilisation, staff levels, orders and inventories) stayed the same as last month at 96.0, and the forecast index (investment, sales, profitability and staff) is at 98.5, up on September’s result of 96. Anything less than 100 indicates a contraction. Constraints reported were 82% markets and 9% production capacity. Staff numbers for October decreased year on year by 3.1%.  “We are seeing some increases in exports, but the large majority of the improvements in total turnover are being fuelled by domestic sales” says NZMEA Chief Executive John Walley.  “The domestic gains in turnover were patchy; although average domestic turnover increased by 11%, only 36% of respondents reported a rise.” “It is not unusual for our real numbers (this is the only survey that reports actual sales and job numbers) not to correspond with our sentiment indexes, sentiment says contraction and the numbers say sales expansion and job contraction. All up, I think the employment trend is the most telling and we should be concerned.” “Market conditions continue as the main constraint on sales.” “Opportunities are seen in the Christchurch rebuild, winning some new customers, but the major threats continue to be the exchange rate and soft demand.” “The reported decrease in staff numbers, coupled with the long term trend of […]

New Zealand has scored highly in an international survey of energy sustainability. The World Energy Council’s Energy Sustainability Index ranks countries on availability, security, affordability and quality of energy, and amount of energy from low-carbon and renewable sources.  The Index shows most countries assessed are far from achieving sustainable energy systems, with many struggling with energy security, affordability and environmental impacts.  The top ten ranked countries are Sweden, Switzerland, Canada, Norway, Finland, New Zealand, Denmark, Japan, France and Austria. New Zealand, in 6th place, scores highly for renewable energy sources and for management of environmental impacts. BusinessNZ Chief Executive Phil O’Reilly says New Zealand’s high ranking is testament to the development of sound energy policies by successive New Zealand Governments over many years. “Affordable, secure, renewable energy sources are essential for our standard of living and for productive business which supports it. “Good energy policy is not easy to achieve – getting the right infrastructure built, accessing energy reserves and having robust systems for things like emissions trading can be complex, as New Zealanders know. “There is much room for improvement, however this ranking is a welcome acknowledgement of success in this important area,” Mr O’Reilly said. BusinessNZ is a member of the World Energy Council.      

Business New Zealand says the manufacturing sector is bracing itself for continuing challenges despite a return to confidence for the first time in four months. The BNZ-Business New Zealand Performance of Manufacturing Index shows activity in the manufacturing sector rose two points to 50.5 in October. A reading above 50 indicates the sector is expanding. Business New Zealand executive director of manufacturing Catherine Beard says the sector has come out of the longest consecutive period of contraction since 2009. She says while there has been an improvement in production and manufacturers are showing more positivity, new orders remain historically low and employment in the sector has declined for five consecutive months. Ms Beard says the environment will continue to be challenging and many of the negative comments relate to slow demand. She says consumers need to be in a more confident frame of mind and be prepared to spend more for it to flow through into manufacturing orders. Ms Beard says what happens in Australia also impacts on New Zealand manufacturing. She says the stronger the Australian economy, the better it is for New Zealand manufacturers because it’s one of New Zealand’s top export markets. Ms Beard says there are some positives in the index with some sectors going strongly with food, beverage and tobacco at 73.3  

The development of the America’s Cup business leveraging programme is now in full swing. In October, NZTE hosted a Champions of New Zealand event in San Francisco to rally New Zealand advocates where many offers of assistance for next year were received, including the use of homes for events, mentoring and guidance for New Zealand companies looking to enter the US market, and bringing VIP guests to events next year. In New Zealand, workshops are being held for a variety of sectors that would benefit from a physical presence at the Cup. On 17 September, NZTE hosted 17 people at the Emirates Team New Zealand Base in AucklandÊfor an investment workshop, to explore some of the opportunities that could potentially be tapped into during and after the America’s Cup. Later this month, food and beverage businesses are also gathering for a workshop to discuss how to make the most of the event. There have been a few questions recently that the America’s Cup organisers won’t be paying for the development of the team bases in San Francisco. As they said in their announcement statement: “We are focusing the activities on where the fans want to be.” This does create a whole new challenge for Emirates Team New Zealand (ETNZ), who will still be based at Pier 30/32. The NZ Inc leveraging programme will remain co-located with ETNZ so that the “Pit Lane” experience of the Base remains wrapped up with the New Zealand showcase and hospitality programme.Ê In addition to allowing our guests to get behind the scenes and out on the water as part of their New Zealand showcase experience, and to view the race preparations and boat launch/retrieval – which was a very popular aspect of the two recent AC45 World Series event in San Francisco.  

Apprentice Simon Imlig Over its 50-year history, Rotorua-based Hayes International has always had a strong commitment to training apprentices. The company firmly believes they get back much more than they put in to apprentices and wouldn’t have grown to where they are today without them. This world-leading roll-forming machinery designer and manufacturer has machinery operating in 77 countries, and that number is growing. “As our export markets expand, it places greater demands on management,” says Marion Clarricoats, Human Resources Manager at Hayes. “And that means it’s harder for us to manage our apprentices. Plus, the cost of managing apprentices is reasonably high, in terms of resources, time and having a senior staff member mentor them instead of being productive.” One option to reduce the time committed to apprentices is by choosing not to employ or manage them. Instead, ATNZ, New Zealand’s largest employer of mechanical engineering apprentices, employs the apprentice and seconds them to work at Hayes. “Four of our apprentices are employed and managed by ATNZ. It removes a lot of the admin and paper work from the company so we can focus on core business. The account manager supports the apprentice from the get-go and keeps the apprentice on track with what they need to be achieving. “I like the transparency of the account managers. They are very open, very knowledgeable, and I know what needs to be done, is done. They always pop by my office when they have visited an apprentice so I’m in the loop. “And sometimes an apprentice will slack off or their focus will drift. Rather than their supervisor giving them a talk, often it’s better if someone outside the company is the one to say “you need to pick up your level. They listen.” As a company with growing exports Hayes needs […]

The Sustainable Business Council welcomes the Pure Advantage Report as a useful contribution to thinking on greening the NZ economy. “In fact, the greening of all sectors of the economy is important,” said Penny Nelson, Executive Director of the Sustainable Business Council (SBC). “SBC agrees with a number of opportunities identified and is working with its members in a number of these areas already. “SBC is introducing corporate training in identifying impacts on ecosystem services, with tools developed by the World Business Council for Sustainable Development and the World Resources Institute while working with the Department of Conservation on increasing business understanding of biodiversity and developing opportunities to partner. “Scaling up resource efficiency is another area of work. SBC members are focusing on how they can increase the resource efficiency of their operations and influence increased resource efficiency in their supply chains, while supporting other mainstream business in New Zealand to scale up in this area. “Where there are areas of focus in common, SBC will work with Pure Advantage to identify how our initiatives can be aligned to make a bigger difference for greening the NZ economy,” Ms Nelson said.      

Historic sweeping changes at the helm of China’s ruling communist party signals the beginning of a new era for the Chinese people and a once in a decade opportunity for New Zealand to consolidate its relationship with the emerging economic powerhouse. Mr. Xi Jinping has been confirmed as the man to lead China after being elected as the General Secretary of the Communist Party of China (CPC) and the Chinese Military. PwC Partner and China sector spokesperson Colum Rice says, “The change in leadership happens only once every ten years, so the world is witnessing an historic moment. And just how Mr. Xi and his new team cope with the enormous responsibility of leading China for the next decade will be pivotal, not only for the Chinese people but New Zealand’s economic future also.” Mr. Xi’s father and predecessor, Mr. Xi Zhongxun, was one of the first leaders to execute the ‘Open China Policy’ which saw China surge ahead and become the world’s second largest economy, overtaking Japan in 2010. PwC Partner and Food and Agriculture sector spokesperson Craig Armitage says, “The success by previous leaders of the CPC means the pressure is on the new leaders to keep the economy growing at a similar rate. Yet, that isn’t going to be easy with growth already slowing from 10% a year to around 7 percent, which is the lowest rate since the start of the Global Financial Crisis.” In his first speech since being elected, Mr. Xi’s set out to allay any fears China’s economic growth is a thing of the past. He covered three key areas in his speech, all of which Mr. Rice and Mr. Armitage believe will be positive in advancing trade between New Zealand and China. Those included: * Improving Chinese People’s wellbeing. * Advancing the […]