Business News

Global CEOs rate China as the world’s top destination for foreign investment, which is consistent with its significantly expanding economy, according to a global survey by PwC and the China Development Research Foundation. The survey ‘Choosing China: Improving the investment environment for multinationals’ found more than half (56%) of CEOs surveyed chose China above other major and emerging economies including Brazil, Russia, India and the US.  Worldwide CEOs say they were attracted to China’s expanding consumer markets, skilled talent pool and government incentives. “China attracted NZ$133.8 billion (US$111.7 billion) of foreign direct investment in 2012 from multinationals seeking to tap into China’s success,” says PwC New Zealand Partner and China Sector Leader Colum Rice. “China’s economic transformation is absolutely dependent on its ability to continue to attract foreign investment. Yet, it faces new challenges as emerging markets become more competitive. Over recent years, we have seen increasing levels of Chinese investments into New Zealand but what the survey highlights is the emphasis that China is placing on attracting inbound investment. This brings into sharp focus the increasing level of competition which New Zealand faces for foreign direct investment,” adds Mr Rice. The survey found less than 10% of CEOs from smaller companies (operating in less than five countries) have operations in China. “China now needs to promote itself as a place of opportunity for smaller and more specialised businesses to keep the investment renminbis flowing in. All the low hanging fruit is gone and this places Kiwi businesses in a strong position. “New Zealand needs to work hard at selling the benefits we can offer growth hungry China, in terms of the innovation we can bring and financial capital we can help attract. “For Kiwi companies with the IP, brands, relationships and knowledge Chinese businesses crave, a partnership could offer […]

The Commerce Commission has today released an updated timetable for completing its determination of a cost-based price for wholesale broadband ¬¬– the unbundled bitstream access (UBA) service.  Telecommunications Commissioner Dr Stephen Gale announced that the Commission will hold a conference on 12 and 13 June to test the views expressed by industry in submissions and cross-submissions on the draft UBA determination. The Commission expects to finalise the UBA determination in August 2013.  The Commission has fully reconsidered its timetable in light of the ommissionGovernment’s announcements that it intends to defer the date on which the new UBA price will come into effect to sometime in 2015, and that it will initiate a statutory review of the policy framework for telecommunications regulation. The Commission consulted with industry on the implications of the Government announcement, and on whether any changes to the Commission’s timeframes were appropriate. Amendments to the legislation in 2011 introduced a cost-based price for UBA from December 2014. The Commission is required to make ‘reasonable efforts’ to complete the UBA price determination – using international benchmarks – by December 2012, and to allow sufficient time to derive the UBA price from a cost model by December 2014, if requested by industry.  “Despite the proposed deferral of these 2014 deadlines, we have concluded that the grounds for delay are insufficient to outweigh the ‘reasonable efforts’ imperative in the Act,” said Dr Gale. “It is possible that a cost model will be required for the UBA price, and that this task will be combined with the cost modelling that is now underway for the underlying copper local loop. The timeframe for such a combined review would be likely to extend into 2015 and may be more compatible with allowing for changes arising from the review of the Telecommunications Act.”  Unbundled bitstream […]

A major new investment in New Zealand’s titanium materials research is set to enable the development of a pan-industry manufacturing base for high value export products, say participants in the programme. Titanium Technologies New Zealand (TiTeNZ), funded by the Ministry of Business, Innovation and Employment (MBIE), will provide a major boost to research activities with widespread national and international application across the medical, aerospace, defence, marine, energy and general engineering sectors. The research collaboration has initial funding of $3.1M pa for two years, but is aiming to establish a long term programme to support high value manufacturing based on Titanium alloys. Titanium Technologies New Zealand builds on current research capability and infrastructure in titanium metallurgy, high temperature materials processing and fabrication, and advanced surface coatings at Callaghan Innovation, GNS Science, the University of Waikato, the University of Auckland and the Titanium Industry Development Association (TiDA). “This investment will enable the development of a world class titanium research platform in New Zealand and create a multi-company, multi-sector manufacturing base for high value export products,” says Professor Ian Brown of Callaghan Innovation who is leading a cluster of Crown Research Institutes and University applied materials research teams working in partnership with New Zealand industrial manufacturers. Oversight of the new programme will be managed by an Industry Advisory Panel which includes Chairs, former Chairs and Deputy Chairs of NZTE, F&P Appliance, Auckland Airport, Wakefield Health and IRL, as well as managers and owners of award-winning manufacturing and engineering companies. The Advisory Board panel members are Jon Mayson, John Calder, Keith Turner, Barry Robinson, Michael Ludbrook and Andy Cameron. The Chair of the Advisory Panel, Jon Mayson, says: “New Zealand has an amazing opportunity around the research and commercialisation of Titanium materials. We are currently at the leading edge internationally in some of our […]

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.