Business News

  David Shearer In 1881, a group of South Island farmers and businessmen established Summit Wool Spinners in Oamaru. It forged a proud heritage and grew into a high-tech international business: one of North Otago’s biggest employers. But in June, fifty jobs were lost at its Oamaru plant. In a population of 13,000 that’s got to hurt. This is happening too often: 70 jobs lost at Norman Ellison Carpets in June. 71 at Flotech. 55 at Gould’s Fine Foods in July. Some of those staff had been loyal employees for more than 20 years. There are plenty of reasons why businesses falter. But these weren’t fragile startups, or badly run. They were once very productive businesses. So what’s the problem? The government blames it on Europe. But our major trading partners, Australia and China, haven’t been in recession at all. In the last three years New Zealand’s GDP has grown just 0.4 per cent a year in comparison to Australia’s 2.8%. The government also blames it on the earthquakes. They were devastating, but economically the rebuild of Canterbury now presents a source of growth. We have tried to shield ourselves from declining living standards by borrowing money and selling assets. Consequently, our overseas liabilities from personal borrowing are among the highest in the world. Meanwhile we’re losing 50,000 good people a year to Australia because our wages are so low. I listened to a speech recently by Professor Gšran Roos, a world leader in innovation. His research shows that each job in manufacturing generates between 2-5 jobs in the rest of the economy. So when Oamaru loses 50 jobs in its wool mill, the ripple effect hits Timaru, Maheno, Hampden, Middlemarch, Palmerston, Ranfurly, Dunedin. Flip that on its head and – given the right conditions – renewed business vibrancy could […]

There is a disconnect between the reported optimism of New Zealand businesses and their readiness to turn positivity into action, according to BNZ chief economist Tony Alexander. At a breakfast briefing held in Auckland this week by Finance & Accounting and Technology recruiter Robert Half, Alexander discussed New Zealand’s prospects for growth in an uncertain world. He shared insightful commentary on what lies ahead for the New Zealand economy with a focus on the labour market driven by overseas migration and the subsequent skills shortage. Alexander predicts a positive economic outlook with the New Zealand dollar poised to remain strong in relation to the rest of the world and he expects economic growth to rise from 1.7% to 2 – 2.5% year-on-year over the next two years. “New Zealand has a productive business base from which we, as a nation, accrue the most financial benefit,” said Alexander. “Our export market is not built simply around processing or manufacturing, but the availability and production of key commodities such as milk powder, wine and meat for export. “Furthermore, New Zealand is a strong investment ‘brand’ with a good reputation which creates a positive driver for export growth.” Because of the increased optimism, Alexander challenged New Zealand employers to look closely at their plans for business growth and their recruitment strategies to help drive that growth. In particular, how they might attract talent during an inevitable skills shortage. “The current skills-short market means companies will be increasingly looking at offshore recruitment options to plug the labour gaps,” said Alexander, challenging the audience: “How will you be hiring in six months time?” The commentary backed up what Robert Half is seeing on the ground: businesses are positive about growth but have been slow to react to what’s happening in the market and are cautious […]

A culture of innovation is needed to catapult New Zealand’s economic performance, says BusinessNZ. Leading businesses were represented at the launch today of Building Innovation, the Government’s progress report on work towards a high value-added economy. BusinessNZ Chief Executive Phil O’Reilly says there is strong support in the business community for the Government’s systematic approach to building innovation. “Recognising that there are many ways to facilitate knowledge-based industries and that innovative businesses can spring from any sectors, it is encouraging to see the wide range of actions taken by Government to advance innovation,’ Mr O’Reilly said. “The Advanced Technology Institute, to be named in honour of Sir Paul Callahan, is expected to be operational by the end of 2012. The Institute will be a connector between business, science and research here and overseas, and is a centrepiece of the innovation policy. “But there are many other initiatives reported on today including expanded TechNZ funding, better government procurement policies, National Science Challenges, more funding for the Performance-Based Research Fund, refinement of trademark and patents law, more investment in engineering at tertiary institutes, encouragement for multi-nationals to conduct research in New Zealand and others. “It is up to business to innovate and grow and take up the Government’s invitation to keep the lines of communication open and provide feedback on how we are travelling towards a higher-tech future.”  

New Zealand’s manufacturing sector remains largely in a holding pattern, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for July was 49.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This is 0.6 points down from June and the lowest July result since 2008. The current result is the second time this year that manufacturing activity has slipped back into contraction mode. BusinessNZ’s executive director for manufacturing Catherine Beard said that the current result for New Zealand is to a large degree mirroring what is currently occurring offshore in the manufacturing scene. “While the current New Zealand result represents a minor fall into contraction, spare a thought for the Australian manufacturing scene that fell significantly in July to 40.3. Their low result is partly symptomatic of high current costs within their sector. “This provides both positives and negatives for New Zealand. On the plus side, it means we become more competitive on the global market for our products. However, the down side is that we still want Australia’s economy to remain healthy given a large proportion of our manufactured exports head across the Tasman.” BNZ senior economist Craig Ebert said “Higher construction is good for local manufacturers, for obvious reasons. And so we’ve been pleased to see increasing signs of life in the various leading indicators of the building industry.” Four of the five seasonally adjusted main diffusion indices were in contraction in July. The strongest result was for new orders (52.9), which actually improved 1.8 points from June. This was followed by production (49.6), which dipped into contraction after falling one point from June. Deliveries (49.1) were the only other index to record an improvement […]

June’s gain, as measured by changes in the volume of production index, was a reversal of the 0.2% and 4.1% declines recorded the year before and in May, respectively. Of the 20 major sectors, 12 posted increases, led by footwear and wearing apparel. The sector’s output climbed by an annual 84.7%. Manufacturing grows 4.4% in June

Executive Director of ExportNZ Catherine Beard says the Government should be congratulated on pulling together all its plans for the export sector into one document and for setting the country a stretch goal of increasing exports to 40% of GDP by 2025. http://www.mbie.govt.nz/pdf-library/what-we-do/building-export-markets-bga-progress-report-august-2012.pdf “We get a lot of feedback from exporters saying they would like to know what the plan is and how we are going to get there. This document is a good summary of all the work that is going on to support the export sector. “The question will be whether there are enough new ideas that are over and above ‘business as usual’ to help exporters reach that target. “The high New Zealand dollar is a challenge for exporters. We hope the Government’s new investment in R & D assistance for industry in the form of the Advanced Technology Institute will help exporters move faster up the value and innovation ladder. This will insulate them from having to compete on price against lower cost countries. “Others ideas we think are worth exploring are the development of cluster policies which are common in Europe and around the world to better leverage the business ecosystem where comparative advantages exist. We are keen on policies that can help our small to medium sized companies get better leverage in big markets, such as collaborating onshore to compete offshore. “The development of our mineral sector could make a big difference to our exports, as could adding water in areas of high agricultural potential. “Exporters also tell us they would like more in-market assistance which could be an area of increased investment in future budget rounds. This could spread the good work that NZTE does to a larger pool of exporters. “Another area of potential we need to tap into in a smarter […]

PIC:Kathy Tasker contract manufacturing. This is the first article in a series on Contract Manufacturing.  What does your company contract manufacture? A wide range of items across the power, marine, agriculture and military industries. Being an ISO 9001:2008 certified manufacturer, we have the in house capabilities for many other industries. What type of work are you looking to attract? Manufacture of electrical assemblies and products. Specifically we have a proven track record for external equipment in harsh environments. A full range of production services are available – from simple assembly and test work (where customers provide all components) through to turnkey systems involving procurement, manufacture, warehousing and technical support.   What sort of expertise do you have available? Our skilled engineering staff has extensive experience with PC-based POS systems, EFTPOS terminals, telecommunications and security systems, metering and metrology, diagnostics, mechanical design and housing. We offer assistance and advice in securing standards approvals for your product. We have a full range of storage, warehousing and computerised inventory management services which include sourcing, importing and customs clearance services. We offer seamless shipping/exporting of product or spares and can ship directly to your customers or distributors. Technical assistance with obsolete or end-of-life component issues and fast prototyping services are available. We currently have high value supply accounts with international suppliers and distributors and an international purchasing network (for difficult to find components), give our customers access to competitively sourced component requirements. The ability to maximise on the purchasing power of the Gallagher Group is just one of the many benefits to using our contract manufacturing services. What type of equipment do you use? Plated Through Hole and Surface Mount Technology production lines including: Reduction of Hazardous Substances (ROHS) and Ball Grid Array (BGA) capabilities X-ray Plastics – 5 axis mill Are there any […]

  By Russell Holland – evangelist with EC Web Sites – www.ec2.co.nz Search Engines work by looking at your content on your web site – so it follows that the more content you have the better chance your pages will be listing higher for more search terms. While it is tempting to be short and concise when writing for the web, the more words you use to describe something the better when it comes to encouraging those search engine robots to your web site. Consider the words that your target market would use when searching for your products or services – there’s little point calling yourself a Barrister or Solicitor when your target customers will be searching for ‘lawyer’. For products make sure that you include manufacturer product numbers or catalogue numbers as this is often what people will be searching for. Don’t forget to include the ‘AKA’ or ‘also known as’ terms, as some markets or industries refer to different terms to describe the same process or tool. Case studies and testimonials reinforce your quality statements and why people should engage with you Ðthey also can contain great search engine bait. Ask your suppliers for information product sheets and have these available on your web site. The search engines will see these – and although not as good as unique content – can help your web site to be found for those words contained in the product information sheets. Links to your web site will also help with the ranking of your pages – the more links into your web site the better -consider your Chamber of Commerce, your Industry Associations and your suppliers as well as any paid advertising you undertake such as Yellow Pages or Finda or ManufacturersSuccessConnection.com Let me know at rus@ec2.co.nz for any IT topic […]

The new Advanced Technology Institute is a great initiative and much needed but will get off to a slow start unless business is deeply involved in it from the outset, the Employers and Manufacturers Association says. “Science, R&D and innovation are the building blocks for our economic future and the ATI could become the leading place for their development,” said Kim Campbell (left), EMA’s chief executive. “But without the full buy in and deep involvement of business at the outset it is destined to start off slowly. “Science on its own won’t realise its potential for delivering wider economic benefits unless business can integrate tightly with it and want to invest more in it. “Without much more science and R&D, the success of all our businesses will be far less than we need it to be to maintain our standards of living. “Science and business need to work together on research projects of potential value to both our knowledge base, and commercial success. “Access to the ATI must not be limited to our high tech high flying companies but act as a magnet for wide business involvement in science and R&D. “Merely setting up an institution such as the new ATI and instructing it to grow new technology based firms won’t of itself do this efficiently. “So while the announcement of the ATI is very welcome its really a statement of commitment that must be matched with actions demonstrating how science and business will communicate and integrate at a fundamental level.”    

By Doug Green A competitive advantage we have in New Zealand is the ability to think outside the box. An advantage Professor Goran Roos believes some of our competitors in Asia and India may not have. We are of course talking here about the manufacturing sector. He also believes that the European mid-size manufacturer is successful is because they focus on the high value, high quality end of the spectrum. While in Australia manufacturers find it tougher because they are still operating in a low cost manufacturing country. Where do you see your company in these examples? I suspect that New Zealand companies are more the former than the latter. There are lots of companies here highly skilled and innovative who are developing high quality products. This I believe is indicated by organisations like NZTE and the types of clients they selectively work with to increase our business avenues overseas. You only need to look at current developments in food and bioscience to realise we have a lot of potential winners here. Speaking of food, July issue is starting its wind up to FoodTech PackTech 2012 which is being held in Auckland from 25-27 September. If ever there was an exhibition of technology and innovation to visit this is it. The food sector has productivity rates consistently above average across some 30,000 companies, employing one to five of our total workforce. Just look at the purpose-built FoodBowl at Auckland Airport with hubs at Palmerston North and in the Waikato and a cluster which includes the Riddet Institute, Plant and Food Research and Fonterra Innovation, Lincoln University in Canterbury – and you realise it is very serious business indeed! All in the name of driving our food and beverage exports to a challenging $150 billion by 2025. There are lots of […]