Business News

Time for Government to act

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during April 2016, shows total sales in March 2016 increased 1.28% (year on year export sales increased by 5.31% with domestic sales decreasing by 5.03%) on March 2015. In the three months to March, export sales increased an average of 18.2%, and domestic sales increased 0.8%. The NZMEA survey sample this month covered NZ$389m in annualised sales, with an export content of 63%. Net confidence fell to 33, down from 45 in February. The current performance index (a combination of profitability and cash flow) is at 103.3, down from 106 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 103, down from 104 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107, down on the last result of 107.67. Anything over 100 indicates expansion. Constraints reported were 61% markets, 28% production capacity, 6% skilled staff and 6% capital. There were no reported net productivity increases for March. Staff numbers for February increased 1.06% year on year. Operators/labourers, tradespersons and supervisors, managers reported a moderate shortage and professional/scientists reported a minor shortage. “March’s export numbers have moved back down towards reality after last month, though remaining positive both for the month and for the average of the last three months. This does stand in contrast with some recent export numbers from other sources, which have had more negative results. Domestic sales fell year on year by 6% for March, after an increase felt last month. On a three month average measure, which is a better indicator of recent trends, domestic sales are flat at 0.4%.” says Dieter Adam, Chief Executive of the NZMEA. “There were a number of comments around the introduction of new products […]

Stay on the downward trend

The Reserve Bank of New Zealand should move to continue to lower the OCR in response to continued low inflation and a high exchange rate, as well as continuing to implement financial stability measures in mortgage lending, say the New Zealand Manufacturers and Exporters Association (NZMEA). NZMEA Chief Executive Dieter Adam says, “Our exchange rate remains stubbornly high, and still has a way to move down to reach a more fair value. The exchange rate is currently sitting significantly above what the RBNZ assumed in their last forecasts.” “The RBNZ should continue its downward interest rate moves to better align New Zealand’s interest rates with those in the rest of the developed world, helping to take some pressure off our exchange rate. “At the same time, it is apparent that risks remain in the housing market, particularly in Auckland, but with increasing evidence of spread. This poses financial stability risks that can damage our whole economy, as well as significant social problems that we are already seeing – people need to be able to afford homes to live in, both as owners or renters. We are also seeing rising household debt, which appears to be moving back to record levels, adding these risks. “This is a complicated issue that needs to be looked at from both sides – demand as well as supply. While supply is the core longer term issue, we are already seeing the limitations of this approach in terms of the speed of response, but more needs to be done in this space by government where possible. LVRs were a positive move for financial stability, but had only the expected limited effects on prices. We encourage the RBNZ to continue to look and at and implement other macro-prudential tools that can protect financial stability. “But the RBNZ […]

Bringing cutting-edge automation to NZ manufacturers

CNC Design has been working with New Zealand machine builders since 1989, with one major goal: setting up their customers with the same knowledge and capability that they would get overseas. “Europe, particularly Germany, is at the forefront of machine building, and obviously, we are quite a long way away”, says Jon Marwick, Managing Director. “New Zealand machine builders suffer from a lack of access to that technology, and we’re here to provide them with the technology, expertise and support that will allow them to compete at an international level.” To do that, CNC Design has developed a close partnership with German firm Siemens and Swiss company Stäubli, world leaders in the field of automation and robotics. CNC specialises in service for the manufacturing, logistics and forestry industries, and has also recently developed into the food industry, where robotics are becoming increasingly important. One of CNC’s customers is a leader in the development of automation solutions for lamb processing floors, traditionally an area that relies on manual labour. “In the meat processing industry, the wash-down requirements are very high, and they use very strong caustic chemicals, so it was not an ideal environment for robots – they had to be covered during operation”, explains Jon. “But Stäubli has developed machines that have the capability to operate without covers, which means they are more hygienic, faster, and have more freedom to move.” According to Jon, robots can help decrease health and safety risks on the plant floor. “Automated machines can provide a safer working environment – simply because operators are not involved in machinery as much, so we decrease the risk of industrial accidents”. Introducing robots into a chain work environment also means more reliability, as they are able to repeat the exact same task with no variations. “Robots don’t get […]

The song remains the same: Buy NZ Made

New Zealand manufacturers are a sturdy, determined lot mostly pushing uphill against the surge of imported products that flood the country. Many of my conversations with them come down to this: We can’t make enough large volume products to be truly competitive with the same imported products. And imported products are difficult to compete against in price – not always quality. Small run manufacturers from around the regions have been describing their competitive advantage, or more accurately, how to find it. This matters because everyone wants to be successful. No company in New Zealand supplies an order for 100,000 widgets because the market just isn’t here. It comes down to: the right staff making the right product for the right market on a quality basis, at the right price. It also comes down to the (potential) New Zealand client buying New Zealand made. And when it comes to export markets locating the client, ‘sealing the deal’ is a real challenge. The world is full of options but sometimes through our quality we can make the products that make the difference. The world found that out recently with the All Blacks winning the world team of the year award. They performed…they were quality…they were the difference. -Doug Green, Publisher, NZ Manufacturer

Regional Manufacturing: Screw Productions, Rotorua

Paul Adlam tells NZ Manufacturer of the unique process used in the business and where the company wants to be in five year’s time. Describe your company’s main areas of activity Screw Productions of Rotorua manufactures screws and has done so for 36 years. The process used is unique in New Zealand as it is a Cold Forging process which produces a strong, good quality fastener. The standard Self Tapping, Woodscrew and Machine screw are the main products made but Solid Rivets can also be produced. A wide range of product is held in stock. What area(s) of the business are currently being developed? Manufacturing of special (custom made) screws is made easier by the company, as to obtain special screws off shore can be difficult, mainly because of the quantities of 1 to 200,000 minimum quantities required, whereas we require much smaller quantities. So a special Custom Made Screw can include any of the following: – It may be Dimensional Head Diameter made smaller to fit in a specific space Head Diameter increased for greater under head contact Head Height reduced to give a low profile Length made to suit applications where length is critical Thread Diameters may need to be adjusted slightly, particularly in Self Tapping applications It may be the Recess Product being exported may require a Phillips recess, not Pozidriv (NZ Standard) To prevent people easily dismantling a Product, like electrical, Security Recess required Really positive Driving recess needed such as Squaredriv Many other types of Recess’s are available It may be to Enhance a Product Head shape altered to suit; say a raised countersunk head Head marked with customers’ name or initials More decorative, or unusual, Recess’s such as; 6-Lobe (Torx), Triwing, Phillips Other Combinations Unusual combinations of head, thread, recess Apply a “Shank Slot” […]

FWF after lucrative Japanese market

In the picture: David Musgrave managing director Functional Wholesale Products. From Regional Manufacturing a section of NZ Manufacturer www.nzmanufacturer.co.nz Eve Johnson sits on the board of Functional Wholesale Products and has come back into the company as Development Manager. Eve has worked with FWF for 11 years now and was formally CEO. She shares with NZ Manufacturer plans for the future. Functional Whole Foods Limited, based in Geraldine, South Canterbury, New Zealand specialises in the production of high quality, cold pressed flax seed oil and seed meal. The Company formulates these products with other natural extracts to produce and market a range of products with particular health benefits. The products are sold widely throughout New Zealand and a number of countries overseas. All products are made from New Zealand raw materials that are certified organic and are from sustainable production. The Company has established and built the flax seed oil market over the past 20 years and remains the market leader in New Zealand. Functional Wholesale Products is in partnership with The Herb Farm developing and producing a range of healing cosmetics that are building momentum. What area(s) of the business are currently being developed? Our partnership with Japan – we are exploring new avenues and revenue streams in this lucrative market for Flax Seed Oil. New routes to market in New Zealand with opportunities to expand the concept overseas. Does the company place much emphasis on R & D? Yes we do and have worked extensively in the past with Massey University and Crop and Food, Canterbury. More recently with Lincoln University through Charles Brennon. We have found the use of students an excellent R&D find! Where do you export to and where are future opportunities? Japan, Australia, Malaysia, Thailand, Vietnam and the Czech Republic. Future opportunities in the […]

A more useful model of tertiary education

By Dieter Adam, CEO of the NZMEA Education is key to ensuring our people will be the best they can be and creating the most productive, capable and innovative economy we can. Human capital is just as important as any other input in a manufacturing business; if not the most important one. However, current research suggests that our return on investment in the tertiary sector is low compared to other OECD countries. Anecdotally, many businesses feel the reality of this when they have trouble filling skilled positions, and at times have to look overseas to find skills that just are not being delivered by the current system. The Productivity Commission is now looking into this problem and how new models of tertiary education could provide better outcomes. Generally, discussions about tertiary education can be dominated by established views and self-serving PR – it is great to see the Productivity Commission undertake a wide and data-driven examination. A root cause of the problems in our tertiary sector lies in its overarching focus on quantity over quality, ‘bums on seats’, in large part due to the funding policies that reward maximising the number of students enrolled, independent of what and how these students are doing. There is also a drive towards enrolling international students, which brings income to the institution and export revenue to the country, but can be driven by offering courses that attract large numbers of students and not necessarily what we need to grow our economy. Forecasts for domestic student numbers show a drop due to demographic factors. It is no coincidence that we currently hear a lot about the financial benefits of a university education, without real consideration for other options that may have better career pathways and opportunities, such as Polytech, trades or apprenticeship education. Many people will be […]

Trade barriers in services must go

Services businesses are suffering from trade barriers that are reducing economic growth, says ExportNZ. ExportNZ is part of a global services coalition that is urging negotiators at the Trade in Services Negotiations (TiSA) taking place this week in Geneva to achieve an effective agreement that will reduce barriers to services trade. ExportNZ Executive Director Catherine Beard says services are a major part of most countries’ economies and the export of services is growing faster than goods exports both in New Zealand and globally. Catherine Beard said as well as commercial services exporters (accountants, lawyers, engineering consultants, architects, education services, financial services, ICT services and others) many manufactured and goods exports are now bundled with a services offering. “The main barriers to services trade are inconsistent regulations between countries, lack of international recognition of skills and qualifications, restrictive standards and specifications, lack of regulatory transparency, regulatory instability, inadequate dispute resolution, lack of access to human capital, lack of access to skilled talent and bureaucracy generally. Many of these barriers could be reduced by international agreement. “Together with Services Industry Associations in the UK, Canada, Australia, Taiwan, Japan, Hong Kong, Europe, Columbia and Mexico we urge the negotiators to progress with a high quality deal that enables the freer flow of services trade.”

Manufactured exports take off – confidence boosted

The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during March 2016, shows total sales in February 2016 increased 64.29% (year on year export sales increased by 74.42% with domestic sales increasing 8.83%) on February 2015. The NZMEA survey sample this month covered NZ$784m in annualised sales, with an export content of 90%. Net confidence rose to 45, up from 12 in January. The current performance index (a combination of profitability and cash flow) is at 106, up from 99.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 104, up from 97 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 107.67, up on the last result of 102.83. Anything over 100 indicates expansion. Constraints reported were 65% markets, 25% production capacity, 10% skilled staff and 5% capital. A net 30% of respondents reported productivity increases for February. Staff numbers for February increased 1.49% year on year. Operators/labourers, tradespersons, supervisors, managers, and professional/scientists reported a moderate shortage. “February’s sales are a stark contrast to the results in other recent months. Year on year export sales had been in the negative since October 2015, going as low as a 25% fall last month – this month’s 74.4% year on year increase is a huge improvement. Domestic sales also bounced back from a fall into the red last month, showing an increase of 8.83% on February last year.” says NZMEA Chief Executive Dieter Adam. “It is worth noting that the comparison month, February 2015, was a particularly low month for exports, which will have contributed to the very large relative increase this month. The survey has also gained some large export respondents, pushing up the annual values and export increase, as well as export content […]

Prepare for new Health and Safety era with EMA

With a new framework for health and safety now in place the EMA is hosting a two day conference to ensure employers are geared up and ready for the new Health and Safety at Work Act. In its 20th year, this practical health and safety event is designed to give attendees tools and insights into where they fit into the new legislative landscape. “Obviously, we have a focus on the new Act this year – and we will be reinforcing the need for employers to ensure they have a sound understanding of what’s required of them. What the key changes are, their obligations and what the new environment looks like,” says Kim Campbell, CEO, EMA. “However, the line-up will deliver much more. As the first major event post the new legislation, we want to reinforce that this is about being proactive and ensuring you have an effective system in place,” he says. The OH&S Concert is a two day conference being held April 19-20 in Auckland, and features 14 speakers. Attendees will hear from experts such as Gordon MacDonald, CEO, WorkSafe New Zealand on its plans as the regulator for bedding in the new legislation; Craig Smith, Independent Chair, Health and Safety Association of NZ on demands on health and safety professionals in the new environment; and Dr Logan Wait, Director ecoPortal for insights into online health and safety management systems. Additionally, there will be case studies and practical insights from companies such as Fulton Hogan and Alexander Group Holdings, along with looking at what can be learnt from the Australian legislation introduced two years ago. There will also be plenty of opportunity for attendees to focus on areas of interest to them, via break out and masterclass sessions – for example governance for directors.

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